Infinera Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of optical networking expert Infinera (NAS: INFN) found a ray of light today, jumping as much as 11.6% on above-average volume on a generally gloomy market day.

So what: Over the weekend, SEC filings showed that Chief Marketing Officer David Welch had made a large open-market purchase of Infinera shares. Assuming he knows more about the company's potential future than we outsiders do, that's a very positive signal for the stock.

Now what: Infinera hasn't exactly been a market darling lately and still trades down by more than 10% over the past three months. Granted, sector peers such as Ciena (NAS: CIEN) and Juniper Networks (NAS: JNPR) have been doing even worse, but Welch is clearly bucking a trend here.

Mind you, Infinera has been burning cash for some time and sports negative operating margins alongside inventory bloat and a terrible cash conversion cycle. Welch seems to be betting on a recovery that his company hasn't shown many signs of achieving. The Motley Fool also owns shares of this five-star CAPS stock and has recommended it in threeseparatenewsletters. Am I crying wolf here? Let me know using the comments box on this page.

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At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Infinera. Motley Fool newsletter services have recommended buying shares of Infinera. Motley Fool newsletter services have recommended shorting Juniper Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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