Microsoft (MSFT)
remains a confounding stock for an investor with a value inclination.
While the stock looks undervalued even on the assumption of 5% free cash
flow declines for a decade, the company clearly as a long way to go to
catch up to rivals like Apple (AAPL) and Google (GOOG)
in markets like mobile, consumer, and online. Likewise, while Microsoft
is stronger in enterprise than the Street seems to think, the company
needs to show stronger operating leverage.
Continue reading here:
Microsoft's Battles - Value Versus Operating Leverage, Enterprise Versus Consumer
Showing posts with label CA Technologies. Show all posts
Showing posts with label CA Technologies. Show all posts
Monday, July 23, 2012
Monday, July 2, 2012
Seeking Alpha: Dells Wins Quest; Now For The Hard Part
Patience has apparently prevailed for Quest Software (QSFT) shareholders, as Dell (DELL)
has publicly announced a deal to acquire the enterprise software
company for $28 per share in cash. While Dell has long been rumored as
the lead suitor for the company (apart from original bidder Insight
Venture Partners), this is the first public acknowledgment from Dell.
Click here for more:
Dells Wins Quest; Now For The Hard Part
Click here for more:
Dells Wins Quest; Now For The Hard Part
Thursday, June 28, 2012
Investopedia: Patience Is Proving Rewarding For Quest Shareholders
Lower-growth tech investments can be tricky, as the Street is often slow to reward consistent cash flow growth in favor of impressive revenue growth. In the case of Quest Software (Nasdaq:QSFT), though, patience is showing that value almost always eventually gets its due recognition.
A Low-Key Bidding War
Quest Software has been a rumored acquisition target for quite some time, as the company would offer an acquirer a platform-neutral array of software offerings in database development, identity management, performance monitoring and data protection. Although definitely not a household name, Quest has trafficked in shortfalls at Microsoft (Nasdaq:MSFT), IBM (NYSE:IBM) and Oracle (Nasdaq:ORCL) to build simpler-to-use solutions that has given it a large and diverse customer base.
Please read the full article here:
http://stocks.investopedia.
A Low-Key Bidding War
Quest Software has been a rumored acquisition target for quite some time, as the company would offer an acquirer a platform-neutral array of software offerings in database development, identity management, performance monitoring and data protection. Although definitely not a household name, Quest has trafficked in shortfalls at Microsoft (Nasdaq:MSFT), IBM (NYSE:IBM) and Oracle (Nasdaq:ORCL) to build simpler-to-use solutions that has given it a large and diverse customer base.
Please read the full article here:
http://stocks.investopedia.
Tuesday, June 26, 2012
Investopedia: Red hat Seems Ill-Fitting
Complaining about valuation
with tech stocks is a little like complaining about diving in European
soccer - none of the true fans really seem to care. That said, one of
the ever-present lessons of the stock market is that valuation always
matters eventually, and flagging growth tends to accelerate that day of
reckoning. While Red Hat (NYSE:RHT)
has had a volatile growth trajectory in its past and that means
investors need to be careful about overreacting to any particular
quarter, the results from Thursday night do nothing to ease worries
about the company's growth.
Please click here for more:
http://stocks.investopedia.
Please click here for more:
http://stocks.investopedia.
Monday, June 25, 2012
Investopedia: To Unlock More Value, CA Needs More Growth
I've been a fan of mid-sized software company CA Technologies (Nasdaq:CA)
for a while now, but it has taken quite a bit of time for the Street to
appreciate it. A relatively recent willingness to share more capital
with shareholders (buybacks
and bigger dividends) has helped, but management really needs to
outline a clear plan to boost growth to close more of that gap between
today's price and the fair value suggested by the company's free cash flow.
Please read more here:
http://stocks.investopedia.
Please read more here:
http://stocks.investopedia.
Tuesday, January 10, 2012
Investopedia: How The Street May Care About CA Again
Trying to sell a cheap low-growth tech stock is often like trying to sell used electronics; sure, it's cheap relative to the value you can get out of it, but nobody is going to want it anyway. This is not a new problem for CA Technologies (NYSE:CA). While these shares do indeed look too cheap on even a conservative modeling basis, it's going to take leveraging the new mainframe cycle and showing growth in cloud computing, to get anybody to care.
The Good
CA Technologies has built itself into what is, in many cases, an indispensable part of the IT environment. This vendor-neutral enterprise and mainframe software vendor sells so many different products that it is not easy to talk about what they do in succinct terms. Nevertheless, here's a shot: CA Technologies helps make sure that an IT system can run multiple systems and applications, while maintaining performance and security. CA products also help monitor how well the system is working, identify problem areas and evaluate the performance trade-offs of new projects. (For related reading, see The Dotcom Crash.)
Read the full piece here:
http://stocks.investopedia.
The Good
CA Technologies has built itself into what is, in many cases, an indispensable part of the IT environment. This vendor-neutral enterprise and mainframe software vendor sells so many different products that it is not easy to talk about what they do in succinct terms. Nevertheless, here's a shot: CA Technologies helps make sure that an IT system can run multiple systems and applications, while maintaining performance and security. CA products also help monitor how well the system is working, identify problem areas and evaluate the performance trade-offs of new projects. (For related reading, see The Dotcom Crash.)
Read the full piece here:
http://stocks.investopedia.
Thursday, July 21, 2011
Investopedia: Big Blue Still Making The Green
For better or worse, IBM (NYSE:IBM) basically tracks the market for tech spending. That makes it a fine one-decision option for investors wanting general tech exposure, but it also means that investors should not expect leading-edge growth. IBM's results suggest that the tech market is still fairly healthy, and the valuation suggests investors still do not fully appreciate the company's virtues.
Services Rebound in Q2
IBM posted an all-around solid performance in the second quarter, as revenue exceeded even the high end of the analyst range. Reported revenue rose 12% for the quarter on an annual basis and 8% sequentially. Foreign currency was a powerful factor this quarter, as constant currency growth was 5% on an annual basis.
To continue, please follow the link below:
http://stocks.investopedia.
Services Rebound in Q2
IBM posted an all-around solid performance in the second quarter, as revenue exceeded even the high end of the analyst range. Reported revenue rose 12% for the quarter on an annual basis and 8% sequentially. Foreign currency was a powerful factor this quarter, as constant currency growth was 5% on an annual basis.
To continue, please follow the link below:
http://stocks.investopedia.
Thursday, May 19, 2011
Investopedia: Worries About Tomorrow Sink Hewlett-Packard Today
Hewlett-Packard (NYSE:HPQ) is another one of those large well-known tech companies that just cannot get much love anymore. Even though the growth outlook here is not very good, the valuation seems to assume a slide to irrelevance. That puts HP in the same crowd as companies like Dell (Nasdaq:DELL), Cisco (Nasdaq:CSCO), Microsoft (Nasdaq:MSFT) and Intel (Nasdaq:INTC) - companies that really have yet to convince the Street that there is a workable plan for growth and a reason to own the stock.
The Second Quarter Wasn't That Bad
The worries about HP's guidance will almost certainly overshadow a decent quarter for the company. Sales rose 3% (1% on a constant currency basis), and actually surpassed estimates. The enterprise, storage and networking segment grew 15%, software grew 17% and imaging and printing grew 5%. That helped to offset a sluggish result in services (up 2%) and a 5% decline in the PC business.
Profitability was also pretty solid in the fiscal second quarter. The gross margin rose 100 basis points, and while the company lost some of that momentum through the operating items, operating income still grew 3.8% and the company reported a small increase in margin. Not surprisingly, software, services and printing were margin leaders, while the PC business was a drag.
To read the full piece, please click below:
http://stocks.investopedia.
The Second Quarter Wasn't That Bad
The worries about HP's guidance will almost certainly overshadow a decent quarter for the company. Sales rose 3% (1% on a constant currency basis), and actually surpassed estimates. The enterprise, storage and networking segment grew 15%, software grew 17% and imaging and printing grew 5%. That helped to offset a sluggish result in services (up 2%) and a 5% decline in the PC business.
Profitability was also pretty solid in the fiscal second quarter. The gross margin rose 100 basis points, and while the company lost some of that momentum through the operating items, operating income still grew 3.8% and the company reported a small increase in margin. Not surprisingly, software, services and printing were margin leaders, while the PC business was a drag.
To read the full piece, please click below:
http://stocks.investopedia.
Monday, May 16, 2011
Investopedia: CA - Quality Is There, Growth Is Not
Looking only at cash flow, CA Technologies (NYSE:CA) should be a slam-dunk for value investors. The company produces a lot of cash flow, has a strong position in its core markets, and provides software that is critical enough to its customers' operations that switch-overs to competitors' products are not undertaken lightly.
To read the full piece, please click the link:
http://stocks.investopedia.
But then there is the growth problem. CA Technologies just is not growing that much, has not grown much in a long time, and serves a market (mainframes) that seems to be in inexorable decline. Given the relative scarcity of technology value investors, then, CA is a stock may well be much too cheap and yet could languish anyway.
A Fiscal Fourth Quarter that Was Not Strong
Sometimes companies report earnings that look bad at first and get better with further exploration. In other cases, the opposite is true. It looks like CA Technologies belongs in that second category.
To read the full piece, please click the link:
http://stocks.investopedia.
Investopedia: Does Symantec Have A Next Act?
In technology, old dogs have to learn new tricks, or the market is all too willing to send them on that unfortunate one-way trip to the vet. That is a challenge, then, for Symantec (Nasdaq:SYMC). Once a hot tech growth stock, nobody cares about that history today. What investors do care about is evidence that the company has a real future in enterprise security and storage/server management.
A Solid Close to the Fiscal Year
Symantec ended its fiscal year on a relatively solid note, at least on a relative basis. Revenue rose 9% in the fourth quarter, and surpassed the high end of the analyst estimate range (a surprisingly narrow range, by the way). The company's consumer business rose 6%, the storage/server business grew 8% and the security/compliance business rose 24%. The real laggard was the company's tiny (5% of revenue) service business, where revenue dropped 21%. (For more, see The Data Storage Gold Rush - Who's Left?)
Other encouraging details related to future business prospects - deferred revenue rose 19%, and bookings increased 23%. License revenue rose 11% this period, while maintenance/subscription revenue rose about 9%. Symantec had mixed performance on profitability. Gross margin (on a GAAP basis) improved by almost two points, while operating income fell 3% on much higher sales and marketing expenses.
To read the full piece, please click this link:
http://stocks.investopedia.
A Solid Close to the Fiscal Year
Symantec ended its fiscal year on a relatively solid note, at least on a relative basis. Revenue rose 9% in the fourth quarter, and surpassed the high end of the analyst estimate range (a surprisingly narrow range, by the way). The company's consumer business rose 6%, the storage/server business grew 8% and the security/compliance business rose 24%. The real laggard was the company's tiny (5% of revenue) service business, where revenue dropped 21%. (For more, see The Data Storage Gold Rush - Who's Left?)
Other encouraging details related to future business prospects - deferred revenue rose 19%, and bookings increased 23%. License revenue rose 11% this period, while maintenance/subscription revenue rose about 9%. Symantec had mixed performance on profitability. Gross margin (on a GAAP basis) improved by almost two points, while operating income fell 3% on much higher sales and marketing expenses.
To read the full piece, please click this link:
http://stocks.investopedia.
Monday, April 25, 2011
Investopedia: Signings A Small Thorn In IBM's Paw
Old-tech hasn't been getting much love lately, but this earnings cycle may help bring investors back to many of these old-school tech names. For although weak signings in the service business may send some investors to the sidelines, IBM (NYSE:IBM) reported an otherwise solid quarter and Big Blue remains a respectable less-risk play on technology.
A Mostly Solid First Quarter
IBM reported top-line growth of 8%, adjusted down to 5% on a constant currency basis. Growth was led by the Systems and Technology business (hardware, mostly), which posted 19% growth with strong mainframe and UNIX business. Software grew 6% this time around, while the services business rose by a like amount.
IBM also delivered solid operating leverage for the first quarter, though readers should realize that there are a lot of adjustments and moving parts here and the numbers will vary from investor to investor depending upon what charges they choose to add back. Nevertheless, gross margin ticked up almost a full point, while operating margin expanded nicely as adjusted operating profits grew more than 20%.
Continue on below:
http://stocks.investopedia.
A Mostly Solid First Quarter
IBM reported top-line growth of 8%, adjusted down to 5% on a constant currency basis. Growth was led by the Systems and Technology business (hardware, mostly), which posted 19% growth with strong mainframe and UNIX business. Software grew 6% this time around, while the services business rose by a like amount.
IBM also delivered solid operating leverage for the first quarter, though readers should realize that there are a lot of adjustments and moving parts here and the numbers will vary from investor to investor depending upon what charges they choose to add back. Nevertheless, gross margin ticked up almost a full point, while operating margin expanded nicely as adjusted operating profits grew more than 20%.
Continue on below:
http://stocks.investopedia.
Investopedia: VMware Singes The Shorts ... Again
Like it or not, "early" and "wrong" can mean the same thing in investing. It is hard to argue that VMware's (NYSE:VMW) valuation makes much sense or will be sustainable, but shorting this name has been a tricky proposition over the past couple of years. So even if the skeptics are right that VMware is apt to hit a wall in terms of growth and market penetration, this could still be a case where Wall Street's ability to remain irrational outlasts an individual investor's ability to stay short and remain solvent.
Another Strong Quarter
Beating estimates is nothing new here, and VMware once again outpaced even the high end of its revenue estimate range. Reported revenue jumped 33% this quarter, with license revenue growing 34% (to roughly half the total). Billings were also quite strong (up 44%), and the company has roughly $2 billion in deferred revenue on the books. Of the company's bookings, 22% were enterprise license agreements (ELAs) and that percentage continues to improve.
There was also strong momentum on the profitability side of the business. Operating income (on a non-GAAP basis) jumped 44% and operating margin rose more than two full points. What's important here is that VMware is not delivering this growth by stinting on its future - R&D spending rose 23% this quarter (again on an adjusted basis), while general and administrative expenses have stayed under control.
To continue, please click the link:
http://stocks.investopedia.
Another Strong Quarter
Beating estimates is nothing new here, and VMware once again outpaced even the high end of its revenue estimate range. Reported revenue jumped 33% this quarter, with license revenue growing 34% (to roughly half the total). Billings were also quite strong (up 44%), and the company has roughly $2 billion in deferred revenue on the books. Of the company's bookings, 22% were enterprise license agreements (ELAs) and that percentage continues to improve.
There was also strong momentum on the profitability side of the business. Operating income (on a non-GAAP basis) jumped 44% and operating margin rose more than two full points. What's important here is that VMware is not delivering this growth by stinting on its future - R&D spending rose 23% this quarter (again on an adjusted basis), while general and administrative expenses have stayed under control.
To continue, please click the link:
http://stocks.investopedia.
Friday, April 15, 2011
Investopedia: Check Point Still On Point
Back in the day, Check Point Software (Nasdaq:CHKP) was in that rarefied sphere of must-have tech stocks. Unlike many of its peers from that era, though, this computer hardware/software developer has not only stayed in the game but continued to prosper as a leader in the network and gateway security field. However, Check Point's valuation has long since come back to more reasonable levels, and it may be time for investors to give this name a serious look.
A Solid Start to the Year
Check Point did not blow the doors off the quarter with a financial report that will send its analysts into hyperventilation, but it was a solid quarter all the same. Revenue grew 15% for the period and surpassed the high end of the range, as product revenue rose almost 16% to $105 million. Deferred revenue performance was not quite as impressive; it rose 10% for the quarter to more than $460 million and slipped about 1% on a sequential basis.
Where Check Point really continues to impress is in its profitability. Gross margin (on a GAAP basis) climbed almost a full point to an eye-popping 85.9%. Operating income is likewise impressive; GAAP operating income rose 22% to over $141 million, while the operating margin was 50.2%. (For more, see The Bottom Line On Margins.)
To continue, please click the link below:
http://stocks.investopedia.
Subscribe to:
Posts (Atom)