Tag Archives: technology

Check Point: A Safe Bet To Ride The Rising Cyber-Security Trend [Seeking Alpha]

Check Point Software Technologies Ltd. (CHKP) is the worldwide leader in securing the Internet, providing customers with uncompromised protection against all types of threats to reduce security complexity and lower total cost of ownership. Check Point offers its customers a portfolio of network security, data security and management solutions.

Innovative Security Solutions

Check Point continues to deliver innovative security solutions to protect both enterprises and consumers. With the recent release of new 600 Appliances, Check Point helps the small businesses to implement comprehensive security to ensure employees and data are protected at all times. Earlier in April, Check Point also launched its new 1100 Appliances to provide enterprise-class security in a compact desktop package, which is perfect for branch and remote offices.

Fundamentally, Check Point continues to benefit from the increasing demand to fight cybercrimes. Check Point has higher revenue growth (3 year average) of 13.3 as compared to the industry average of 6.4 for the industry of application software. Check Point has much higher margins as compared to the averages. Check Point also generates solid ROA of 14.0 and ROE of 18.9 as compared to the averages of 8.2 and 15.5. Check Point has a strong cash position with $1.39B total cash and zero total debt. Check Point also generates over $905M of operating cash flow with a levered free cash flow of $660M, ttm.

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Alcatel-Lucent: A Volatile Stock Requiring Lots Of Patience [Seeking Alpha]

Alcatel-Lucent (ALU), a France-based company with a market cap of $3.13B, is a provider of telecommunications technology and services, which also engages in mobile, fixed, Internet Protocol and optics technologies, applications and services. With disappointing Q1 numbers, it may be still too early to give up ALU.

Disappointing Numbers

For Q1, 2013, ALU reported a net loss from continuing operation of $0.20 per ADS, which is lower than the Zacks Consensus Estimate of -$0.10 per ADS. Sales were nearly flat at $4.21B (€3.23B Euros) with a loss of $461.72M €353M Euros) as compared to a gain of $337.49M (€259M Euros) a year earlier. FactSet had forecast a Q1 loss of $345.31M (€265M Euros) on sales of $4.17B (€3.2B Euros).

As the company continues to be on a $1.63B (€1.25B Euros) restructuring program, cutting 5,000 jobs, new CEO Michel Combes still has a tough road ahead for his plan of “one month of listening, two months of defining a project, and three years of transformation.” Combes just became CEO earlier this month.

Geographic and Segment Breakdowns

Geographically, North America was up 15.1% while Asia Pacific region had a low single-digit decline (5.8%) year-over year. Europe continued to suffer with a decline of 10.1% in revenue. Lastly, revenue from the Rest of World decreased 13.3% due to poor performance in Central and Latin America, the Middle East and Africa.

Akamai: Hitting A Home Run With Expanding Margins [Seeking Alpha]

Akamai Technologies, Inc. (AKAM) provides content delivery and cloud infrastructure services for the delivery of content and applications over the Internet. Many companies spend money on web acceleration and content delivery technologies, such as the services provided by market leader Akamai, to avoid lost sales and customers due to slow web pages. Despite the controversial guidance earlier from the management, Akamai delivers with solid numbers.

Surprising Home Run

Akamai reported Q1 revenue of $368M, 15% increase from the year-earlier quarter, beating analysts’ estimate of $357.7M. The management forecasts revenue of $368M to $378M in Q2 compared with a $363M analyst estimate. Q1 profit, including an 8-cent tax benefit, rose to 51 cents a share from 36 cents a year earlier, topping the average estimate of 46 cents, according to data compiled by Bloomberg. AKAM also forecasts Q2 profit excluding some items of 44 cents to 46 cents, compared with a 44 cents estimate.

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Broadcom: Numbers Are Connecting For Investors Now [Seeking Alpha]

Broadcom Corporation (BRCM), with a market cap of $19.96B, is a global semiconductor solution for wired and wireless communications, providing system-on-a-chip, and software solutions. Broadcom continues to benefit from strong smartphone/mobile device sales, whereas BRCM’s chips provide short-range wireless connectivity in Apple (AAPL)’s iPhone and iPad, as well as Samsung’s Galaxy line of mobile devices. Apple and Samsung contribute for more than 30 percent of BRCM’s sales, which was helped by stronger iPhone sales.

Strong Revenue and Profit

BRCM posted Q1 revenue of $2.01B, up 9.7 percent from the year-earlier period and beating analysts’ expectation of $1.91B. BRCM reported net income of $191M (33 cents per share), up from $88M (15 cents per share) in Q1, 2012. Excluding one-time costs, BRCM earned 65 cents per share, beating analysts’ estimate of 56 cents per share. Solid results were due to strong demand for wireless base band and connectivity chips. The management also sees sequential growth ahead in broadband business. BRCM expects Q2 revenue of $2.02B-$2.18B, beating analysts’ average projection of $2.05B.

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SanDisk Is Playing Safe Even With Improved Fundamentals [Seeking Alpha]

SanDisk Corporation (SNDK), with a market cap of $13.48B, is a global leader in the NAND flash memory market. SanDisk designs, develops and manufactures data storage solutions in a range of form factors using its flash memory, controller and firmware technologies. SanDisk’s management is expecting a healthy supply/demand balance this year and has raised its 2013 revenue target and given a forecast for June-quarter revenue that beat analysts’ expectations. As reported by Bloomberg, SanDisk is limiting increases in output from its factories and expects enough demand to keep prices healthy this year.

Q1, 2013 Result

Strong SSD Growth

The highlights for Q1, 2013 was the revenue from SSD product, which grew over 200% on a year-over-year basis. Global retail channels also showed strength and produced 34% revenue growth as compare to the last year.

Increasing Retail Mix

As I described last quarter, the company is now reporting the channel mix of revenue as retail and commercial. The commercial channel includes OEM customers, B2B customers, direct enterprise customers and licensees. The total Q1 revenue was 62% commercial and 38% retail, reflecting a year-over-year mix shift toward retail of 6 percentage point driven by strong growth in that channel.

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4 Technology Stocks With Cheap Free Cash Flow And On Long-Term Uptrend [Seeking Alpha]

Free cash flow is important for the company to pursue opportunities to enhance shareholder value, but it does not have to be expensive. In this article, four technology stocks with cheap free cash flow, which are also on the long-term uptrend, will be presented. They are Oracle Corporation (ORCL), Broadcom Corporation (BRCM), BMC Software, Inc. (BMC), and Cadence Design Systems Inc. (CDNS).

Oracle Corporation

Oracle, with a market cap of $158.41B, is a provider of enterprise software and computer hardware products and services, including databases, middleware and applications.

On March 25, 2013, Macquarie reiterated a neutral rating for ORCL with a price target of $36.00. Analysts currently have a mean target price of $37.72 for ORCL, suggesting 12.73% upside potential based on the closing price of $33.46 on April 12, 2013. Analysts, on average, are projecting an EPS of $0.88 with revenue of $11.14B for the current quarter ending in March, 2013.

Fundamentally, ORL has a high operating margin of 38.44% and the long-term EPS growth is expected to be 10.66% for the next five years. ORCL has a solid balance sheet with a total cash of $33.41B and a total debt of $19.75B. From the valuation perspective, ORCL offers a cheap free cash flow (P/FCF of 13.94) with a low Forward P/E of 11.42.

Technically, ORCL continues to be on the long-term uptrend since mid-November, 2012. ORCL had bounced back from its long-term support after it missed its earnings in the last quarter.

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Agilent: Great Numbers Yet Low Valuation [Seeking Alpha]

Agilent Technologies (A), with a market cap of $14.38B, is a provider of core bio-analytical and electronic measurement solutions. Agilent has four businesses: chemical analysis, life sciences, diagnostics and genomics, and electronic measurement. For investors looking for a quality, undervalued stock with an economic moat, Agilent is worth to take a look at.

Management Update

Despite the slow economy, Agilent grew 4% in revenue with an operating cash flow of $1.2 billion for 2012. With the acquisition of Dako, the overall measurement market was expanded to $54 billion. Lastly, the dividend was increased by 20% to $0.12 a share, and a stock repurchase plan (up to $500 million for the remainder of FY 2013) was authorized.


Revenue/Market Share Market Opportunity
Diagnostics & Genomics Group $400 million Revenue; Expecting $700 million for 2013; Growth at 8-10% range Market opportunity in anatomical pathology, molecular diagnostics is about $7 billion
Life Science $1.6 billion market share $21 billion of measurement tools in the life science market
Chemical Analysis #1 in food testing, #1 in environmental testing, #2 in forensics testing and #1 in chemical and energy $13 billion
Electronic Measurement Group #1 in communications; #1 in industrial and computations, semiconductors; and #1 in aerospace and defense; Growth slower than chemical analysis or life science $13 billion

Exciting developments

Combination of Dako allows Agilent to bring advanced care for cancer victims by providing the antibodies, reagents and instruments, enabling physicians to choose the right form of treatment, the first time. Dako sees 1/3 of all of the cancer tissues in the world.

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Baidu Eye Vs. Google Glass: A New War Brewing [Seeking Alpha]

Baidu.com (BIDU), with a market cap of $30.06B, is the dominant search engine in China. While Google Inc. (GOOG)’s Google Glass is in development and Google Glass Explorer program was launched, Baidu affirmed its development of Baidu Eye. No, it’s not an April Fool’s joke, such as Google Nose. Rather, Baidu Eye could be the next product for Baidu as it continues to integrate its search, image, and voice recognition technology.

Products and Technologies

Baidu is a clear market share leader with around 80 million daily active users for its flagship web search product on mobile according to Baidu’s internal tracking. The management expects this trend to continue as Baidu search results become more and more location specific and personalized.

By integrating data and information from Baidu’s verticals and from a whole range of third parties like Cellphone in real estate, Qunar in travel and URN application, Baidu now has the most comprehensive data set of any LBS, location based services, service provider. Users will use Baidu daily as it offers a huge database of merchants and other useful information. Baidu continues to improving the image recognition technology while operating one of the world’s most comprehensive index official images with advanced image matching technology. Baidu is rapidly fulfilling its vision for image recognition to be just as effective as for text and voice.

Baidu Eye?

According to Reuters, as said by Kaiser Kuo, Baidu’s spokesman, Baidu Eye is a device mounted on a headset with a small LCD screen, which will allow users to make image and voice searches as well as conduct facial recognition matches. As quoted from Kuo, “What you are doing with your camera, for example, taking a picture of a celebrity and then checking on our database to see if we have a facial image match, you could do the same thing with a wearable visual device.” Baidu Eye may perform the same functions as Google Glass, which augments reality via a see-through heads-up display above the users’ eye where audio and live images can be streamed, and the device is also able to perform computing functions.

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Salesforce.com And Symantec: Still Growing, Just Slower, Buy On Dip [Seeking Alpha]

Salesforce.com, inc. (CRM) and Symantec Corporation (SYMC) are two software and programming companies, with strong EPS growth in the past five years. Both stocks had received recent updates from analysts and will be analyzed fundamentally and technically. Investing strategies will also be presented.

Salesforce.com, inc.

CRM was up 1.93% and closed at $176.06 on March 22, 2013. CRM had been trading in the range of $120.18-$187.94 in the past 52 weeks. CRM has a market cap of $25.78B with a beta of 1.40. With estimated high annual EPS growth for the next five years and a healthy balance sheet, more upside is expected for CRM in the long-term.

On March 20, 2013, FBN Securities initiated coverage on CRM with an outperform rating and a price target of $210.00. On March 18, 2013, FBR Capital reiterated an outperform rating and increased its target price from $200 to $225 for CRM. Analysts currently have a mean target price of $196.54 and a median target price of $205.00 for CRM, suggesting 11.63%-16.44% upside potential. Analysts, on average, are estimating an EPS of $0.42 with revenue of $887.23M for the current quarter ending in April, 2013.

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Micron And SanDisk: More Growth Ahead With Brighter Outlook [Seeking Alpha]

Micron Technology, Inc. (MU) and SanDisk Corporation (SNDK) are two technology companies offering memory and data storage technologies and manufacturing capabilities, with higher revenue growth and lower P/B as compared to their peers. Both companies had received positive calls from analysts recently and will be reviewed fundamentally and technically in this article. Investing strategies will also be reviewed.

Micron Technology, Inc.

MU was up 10.69% and closed at $10.04 on March 22, 2013. MU had been trading in the range of $5.16-$10.27 in the past 52 weeks. MU has a market cap of $10.26B with a beta of 1.33. Despite posting a quarterly net loss for Q2, 2013, MU’s share price jumped with improving outlook for memory chip prices and analysts’ upgrades. MU’s long-term profitability will be limited by tough competition and cyclical disparities between supply and demand as memory chips are traded as a commodity. However, with improving fundamentals and outlook, more upside could be expected for MU.

On March 22, 2013, Jefferies reiterated a buy rating and boosted its price target by 50 percent, from $10 to $15 as MU impressed analyst with solid execution during Q2 and developing earnings power. The analyst said,

“Solid execution allowed positive secular industry fundamentals to flow through the model driving 600bps of GM expansion QoQ. Our recent conversations with investors in Europe indicate the power of Moore Stress in driving structurally favorable DRAM and NAND prices, gross margin expansion, and $2 EPS ex-Elpida, is under-appreciated. We believe there is upside to our Street-high estimates.”

On the same day, RBC Capital’s Doug Freedman raised his price target on outperform-rated MU from $10 to $12 following solid Q2 results after the close.

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