The Stock To Watch In 2017

(RTTNews) - OCLR is the stock in focus, on the merit of its valuation and upbeat guidance revision. The company Oclaro, Inc. (OCLR), a vendor of fiber-optic components, revised up fourth-quarter revenue guidance above Street estimates.

The stock was published in our premium service "Short-Term Investor" on November 2 at an opening price of $8.07. In just 14 trading days, the stock touched a new 52-week intra-day high of $10.19, returning a gain of 26% to investors.

Originally, we identified OCLR on Feb 3, 2016 and published the stock on Short-Term Investor the same day at an opening price of $4.13. The stock marched on and Sep 22, it touched $9.34 representing a gain of 126% from our published price.

We think OCLR is at a good price point again and has at least 10% upside from current levels, as the accompanying news looks good.

For the fourth quarter, the company sees revenue in the range of $153.5 million to $154.0 million, at the high end of prior guidance of $146 million to $154 million provided on November 1, 2016. Analysts are modeling revenues of $150.9 million.

The company also sees *GAAP gross margin of about 39.5% and non-GAAP gross margin of approximately 40%, above the prior non-GAAP guidance of 33% to 36%. Non-GAAP gross margin excludes the impact of $0.5 million in stock-based compensation. *GAAP operating income of about $33 million and non-GAAP operating income of about $36 million, above the prior non-GAAP guidance of $22 million to $26 million. Greg Dougherty, Chief Executive Officer of Oclaro, commented, "We expect revenue to come in at the high end of guidance as 100G and beyond sales again exhibited excellent growth. In addition, we expect the quarterly results to reflect record levels of gross margin and operating income and exceed our prior guidance. Our performance was driven by strong execution, a richer product mix, and favorable foreign exchange rates."