Earlier this week, Extreme Networks (EXTR), reported earnings that missed analysts expectations. The miss was primarily caused by higher discounts and commissions for the company’s fiscal year end, rather than any indication of slackening customer demand.

Extreme Networks (EXTR), one of our dissappointing picks this year, has finally completed its options investigation and filed up-to-date financials with the SEC. We believe that this represents a turning point for the company, as it eliminates a major uncertainty that we think has held back the shares, even as Avaya, a big partner of EXTR was scooped up by private equity at a significant premium, and Foundry (FDRY), EXTR’s main comp, has slowly regained favor with investors after it too finally filed updated financials with the SEC.

Last week, Extreme Network’s (EXTR) announced disappointing financial results, which prompted significant selling in the stock. Despite generating nearly $10 million in cash during the quarter, the company’s top-line remained under pressure.

It´s always nice to get the Wall Street hype machine rallying behind our stock picks. So we were quite pleased this morning when Ryan Hutchinson, over at WR Hambrecht, upgraded Extreme Networks (EXTR) and published a 12 month price target of $6.50 per share for the stock.

Late last week, Extreme Networks (EXTR) reported quarterly results, which continue to support our investment thesis, that EXTR has limited downside risk at current prices, and substantial upside potential, assuming new management continues to drive positive change at the company.

Last evening Ericsson announced an agreement to acquire Redback Networks (RBAK) for $2.1 billion in cash or about $25 per share. This allows us to lock in a 150%+ gain on our original Redback investment, the first pick we made on this site back in October 2005.
More importantly, though, are the repercussions that the Redback […]

If you’ve been following our picks for some time, you know that the first stock we mentioned on this site was Redback Networks (RBAK). Despite a huge amount of volatility, RBAK has been a very profitable investment for us, having more than doubled since we first wrote about it fourteen months ago. The success of the RBAK investment has had as scouring for more network-related “bubble stocks” that have fallen on hard times and yet appear to offer good odds of turning around. Extreme Networks (EXTR) definitely fits the bill and we believe the shares could appreciate significantly in the next 12 to 18 months.