Consider Getting Long Brocade (BRCD)
The market has been white hot recently, and this should give cautious investors pause. If you are looking to buy stocks right now, it may be prudent to look at some names that have underperformed. The reason for this, is because many momentum stocks will likely be hit hard if the market pulls back in the near term. One stock that has been under pressure recently, is Brocade (NASDAQ: BRCD). On the yearly chart, BRCD has appreciated 101%. In the last six months, however, the shares are down over 30%.
On February 23, the networking equipment maker cut its fiscal 2010 projections, and the stock promptly lost nearly 17% of its market cap. To be sure, the recent news in Brocade (BRCD) is not necessarily positive, but this may be an opportunity to get in at the bottom. Standard & Poor's has a 5 star rating on BRCD shares, which are currently trading at $5.66 compared to a 52 week high of $9.84. Certainly this trade is risky, but it also offers significant upside reward.
