Tony H -- FDRY et al: I haven't bought yet, but I have an eye on the entire intelligent-networking sector and plan to buy in heavily. The CSCO/ARPT deal has obviously sent a shock wave through the sector, raising fears that CSCO will run all competitors out of business. I'm still DDing this issue, but my strong feeling at this point is that the selloff in FDRY, FFIV, and ATON is creating a tremendous buying opportunity. We need to see these stocks bottom and reverse before getting too excited, though.
FDRY's operating results speak for themselves: brilliant performance, with the promise of ongoing hyper-growth. PEG is a little high at 2.5, but that's hardly exorbitant in this market.
FFIV is the best value -- PEG is under 1, at current prices and estimates -- but has a technology cloud hanging over its head: its product is software that runs on a conventional PC rather than being built directly into the switch as a hardware/software solution. (The upside to this solution is that it can be inserted as a "plug-and-play" component into existing networks; there's no need to swap out switches.) FFIV is currently building out a firmware division, which means that it's moving toward next-generation solutions.
ATON is approaching profitability and, in my opinion, is the best takeout candidate if LU, NT, ALA, etc., feel the need to keep up with CSCO by acquiring a smart switch: its switch technology has rated well in test results I've seen, and its market cap is a relatively modest $2.3 billion. |
