Should You consider This NASDAQ-Listed Communication Equipment Stock: Clearfield Inc

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Clearfield, Inc. develops, produces, and sells fiber optic management, protection devices, and delivery products for communications networks. With the use of the company's technologies, its clients may link twice as many homes in their Fiber to the Home (FTTH) constructions while using less energy. Clearfield and Nestor Cables are the company's two operating segments.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

  Stock Performance:

• CLFD has been corrected by 16.78% in the past three months, furthermore with a 44.13% of correction in the past six months.

• The stock is leaning towards its lower band of its 52-week range of USD 111.03 and 52-week low price of USD 22.91. Post the announcement of FY23 results the stock has given a return of around 14.51%, with currently price has broken above a resistance zone of USD 25-USD 27.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA, with the current oversold RSI of around 57.25.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

The graph below demonstrates that CLFD is more profitable than its industry rivals at the given levels of operation. Also, a higher current ratio for the company denotes better short-term working capital liquidity. It also proves that a business has access to sufficient liquid short-term assets to pay down all current short-term debt, if necessary.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~53.91% of the total shareholding, signifying concentrated shareholding. BlackRock Institutional Trust Company, N.A. and Franklin Mutual Advisers, LLC [Activist] are the biggest shareholders, holding the maximum stake in the company at ~12.42% and ~9.95%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY23:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

  Stock Performance:

• CLFD has been corrected by 16.78% in the past three months, furthermore with a 44.13% of correction in the past six months.

• The stock is leaning towards its lower band of its 52-week range of USD 111.03 and 52-week low price of USD 22.91. Post the announcement of FY23 results the stock has given a return of around 14.51%, with currently price has broken above a resistance zone of USD 25-USD 27.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA, with the current oversold RSI of around 57.25.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 11, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.