Oclaro Inc., which makes optical and laser components for use in telecommunications, medical and other industries, rose to its highest price in almost five months after introducing its latest 100G transceiver.
Shares of Oclaro rose 11 percent to $3.05 at the close in New York, the highest closing price since April 26. The stock has risen 8 percent this year.
“They had news on their 100G, which is in production now,” Hamed Khorsand, an analyst at BWS Financial in Woodland Hills, California, said in a telephone interview. “This shows their product segment is expanding. That’s given them a pop today.”
San Jose, California-based Oclaro unveiled a second-generation 100G CFP transceiver and first-generation CFP2 100G transceiver for transmissions over standard single-mode fiber. These new smaller devices unveiled Sept. 11 cut power use and are designed to meet the needs of higher-speed networks.
Oclaro plans to demonstrate the new transceivers and other products released this week at the ECOC Exhibition scheduled Sept. 17 through Sept. 19 in Amsterdam.
“The new products will create a little buzz ahead of the conference,” Alexander Henderson, an analyst at Needham & Co. in New York, said in a telephone interview. “There’s been some strength in the segment, which had been beat up, with both Finisar and Emcore also higher today.”
Oclaro competes with Sunnyvale, California-based Finisar Corp., a maker of fiber-optic transmission gear. Finisar climbed 3.5 percent to $15.89 in New York. Emcore Corp., an Albuquerque, New Mexico-based maker of fiber optic and solar photovoltaic products, rose 1.8 percent to $4.99.
“There was a negative perception already in the market place for these companies, but optical is back in the groove with investors again,” Khorsand said. He has a buy rating on Oclaro with a target price of $6.50 a share.
Through today, the stock has climbed 44 percent from its 2012 low of $2.12 on May 14. The company announced a merger with Fremont, California-based Opnext Inc. on March 26. The merger was completed July 24. Khorsand upgraded the stock to a buy from a hold March 8.
Their merger created the second-largest global provider of optical components and modules to laser markets and optical communications businesses.
Oclaro has said “they will get lots of benefits from integration of Opnext and it will improve profitability,” Henderson said. “The market had been skeptical and we are in an environment of economies decelerating.” He rates Oclaro a hold and doesn’t provide price targets on stocks with such ratings.