Monday’s Top Upgrades (and Downgrades): Infinera Corp. (INFN), Cabelas Inc (CAB) and More

Getting aggressive on Infinera
Last but not least, we come to Infinera, an unprofitable networking equipment maker for which expectations always seem to run high. Today is no exception, as analyst MKM Partners urges investors to rush right out and buy a few shares ahead of earnings — which are due out as early as tomorrow.

MKM says this not because the company’s expected to wow us on Tuesday, mind you. To the contrary, most analysts on Wall Street think Infinera will report a $0.06-per-share loss, equivalent to what it lost a year ago. If they’re right, that’ll bring total 2012 losses to $0.40 per share — but here’s the thing: In 2013 Infinera is expected to cut those losses by 75% (to $0.10 a share), en route to an eventual transformation into profitability. It’s this prospect of improved performance going forward — and maybe even some management guidance that would confirm Infinera is on track — that has investors feeling optimistic about Infinera’s chances tomorrow.

As for me, though… I’m still looking at numbers that show Infinera burning increasing amounts of cash ($100 million over the past four reported quarters alone), and feeling skeptical. Infinera remains a “show me” stock. Mere promises just won’t cut it.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Infinera and LeapFrog Enterprises (NYSE:LF). The Motley Fool owns shares of Infinera and LeapFrog Enterprises.

The article Monday’s Top Upgrades (and Downgrades) originally appeared on Fool.com and is written by Rich Smith.

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