When it comes to making the critical connections between a communications service provider and an end-user, you want to get your equipment from a manufacturer which grew up with the industry. At 22 years of age, there is a Huntsville, Alabama outfit that can claim to be a real grandfather in the field.

Adtran, Inc. (NASDAQ: ADTN) is a leading provider of networking and communications equipment, with a portfolio of more than 1,600 devices for use in the last mile of today's telecommunications networks. Widely deployed by both carriers and enterprises, the firm's systems enable voice, data, video, and Internet communications across copper, fiber, and wireless network infrastructures. Customers include Verizon Communications (NYSE: VZ), AT&T (NYSE: T) and Sprint Nextel (NYSE: S).

The company surprised the Street last week, when it reported Q1 EPS of 22 cents and revenues of $110.3 million. Analysts had been looking for 20 cents and $105.9 million. Management expected gross margins in the high end of the 50-60% range, going forward. The CEO attributed success to strength in High Data Rate Digital Subscriber Line demand, improving broadband access trends and ongoing momentum in inter-networking products. He anticipated further solid results, on the basis of new business wins and new product launches. ADTN shares popped on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the stock with four "strong buys," three "buys," fifteen "holds" and four "sells." Analysts see a 14% growth rate through the next year. The ADTN Price to Book ratio (4.17), Operating Margin (21.95%), Net Profit Margin (16.66%), Return on Assets (13.18%) and Return on Investment (14.22%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $19.96 and $27.24. A stop-loss of $22.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.