An unloved investment is one that's been beaten down - but is actually a great value. Investors then get an amazing entry point into a good long-term investment.
Ruckus stock came to the attention of Money Morning Defense & Tech Specialist Michael Robinson in late September. He liked the fact that RKUS supplies a technology that will soon be in very high demand.
Ruckus Wireless: About the Company
Founded in 2004, Ruckus Wireless started out serving the residential Wi-Fi market. In the decade since, the Sunnyvale, Calif.-based company evolved into a global supplier of advanced wireless technology to cities and corporations. Ruckus sells high-capacity Wi-Fi access points as well as cloud-based Wi-Fi access and location services. RKUS is best known for a technology it calls "Smart Wi-Fi." It's designed to work in dense and noisy areas such as urban centers and stadiums. The company's 44,000 clients include such familiar names as Sprint Corp. (NYSE: S), Time Warner Cable Inc. (NYSE: TWC), and LaQuinta Holdings, Inc. (NYSE: LQ). Ruckus stock went public in November 2012. RKUS employs about 800 people. It has a market cap of $800 million.
Ruckus Stock: Why It's Unloved
Among other things, Ruckus stock is suffering a long-running hangover from an overpriced IPO. In the two months after it went public, RKUS stock soared by more than 100%. But six months later, Ruckus stock was down 50%. It sank as low as $10.24, well below the $15 offer price. RKUS has bobbed up and down since, and as of today (Friday) had skidded to $9.94. More recent catalysts include a slight miss in its 3Q earnings. Ruckus reported revenue of $85 million, but the Wall Street consensus was for $85.1 million.
"As we have seen before, the market overreacts to even the slightest of misses," said Robinson. "And that's clearly the case here."
But that was back on Nov. 3. Since then a string of insider selling reports have pummeled Ruckus stock. Since Nov. 7, Ruckus has had no less than 12 instances of insider selling. The four that have come after the first of the year have been particularly damaging, pushing RKUS stock down more than 18%.
But the prospects for Ruckus stock are better than many seem to think...
Why Ruckus Is a Stock to Buy
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.