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Say "See You Later" to Ciena


Shares deserved the whooping, and stock should go lower still.

Is it just me or did this week fly by? (Not that I'm complaining.)

Asian stocks rebounded overnight. The Hang Seng and the Nikkei were up 0.93% and 2.48%, respectively. European stocks were in positive territory early this morning, too. And here in the US, we're currently trading higher.

Here's what I'm seeing this beautiful Friday morning:

Ciena (CIEN):
See ya, Ciena...

Check out the company's fourth-quarter numbers. Excluding items, it put up a loss of $0.12, and that wasn't too impressive given the Street was at a loss of $0.07. The bulls will argue, however, that it beat on the top line.

My take on the situation:

1. The shares deserved the whooping they got in yesterday's session on heavy volume. In fact, I think the stock deserves to go lower still.

2. It's expected to put up $0.09 a share in 2010 and that doesn't impress me in the slightest.

3. Absent a near-term catalyst or extenuating reason, I'm not punching this ticket -- I'd rather check out Cisco (CSCO).

For my previous take on the company, see Don't Let Ciena's Stock Fool You.

Costco (COST):
The Washington-based wholesale club (where I dole out no less than $100 every month) was out with its first-quarter numbers. In case you missed it, the company turned in a profit of $0.60, which was what the Street was looking for.

My feel:

1. I can't complain about the quarter. It met expectations, and I'm a fan of the wholesale club as it draws the cost-conscious among us.

2. But right now, retail is so dog-eat-dog with Walmart (WMT), Kmart (SHLD), and Target (TGT) offering crazy low prices and advertising in a big way. Both take some consumer attention off of Costco.

3. Does the company really have the lowest prices on clothing and electronics, two popular holiday items? I'm not so sure. Personally, I'd bet on Walmart for that.

4. Bottom line, it was a good quarter and this is a good story. But I don't see anything huge that tells me now is the time to belly up. Long-term though, I remain on the bullish side of the ledger.

For my previous take on the company, see Four Reasons to Pass on Costco.
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No positions in stocks mentioned.

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