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Is Juniper on the Ropes?

David Becker
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www.iforex.com

Juniper Networks (NYSE:JNPR) has been trading on the defensive and is poised to make a move lower. The company designs, develops, and sells products and services for high-performance networks worldwide. The company operates in two segments, Platform Systems Division and Software Solutions Division.

The stock has sagged after Juniper Networks’ infringement case against Palo Alto Networks (NYSE:PANW) resulted in a mistrial when a jury failed to reach a decision on all three of the disputed patents. Juniper, which provides security software to prevent unauthorised computer intrusions, sued Palo Alto in 2011. A jury in federal court in Wilmington, Del., deliberated about six hours Friday following a two-week trial before telling U.S. District Judge Sue Robinson that they couldn’t agree on the third patent.

The 52-week range of JNPR is $ 15.62- $28.75, and the stock hit a 52-week high in January 2014. Earnings per share increased 54% quarter over quarter. The three year growth rate of earnings was down 9%. Sales increased 12% quarter over quarter and the three-year growth rate of sales was up 2%. The profit margin for the company is 18.3%.

There have been recent insider sales of the stock which should give investors’ pause. Director Scott Kriens sold 1,500,000 shares for $26.62, generating $39.93 million from the sale. EVP Chief Customer Officer Vincent Molinaro sold 45,104 shares for $26.49, generating $1.19 million from the sale. Director William Stensrud sold 10,000 shares for $27.00, generating $270,000 from the sale. EVP Platform Sys Div Rami Rahim sold 3,000 shares for $26.99, generating $80,980 from the sale.

The stock price has slowly moved lower and has broken through support near the 50-day moving average. Momentum is negative with the MACD (moving average convergence divergence) index printing in negative territory with a downward sloping trajectory.

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