Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : F5 Networks, Inc. (FFIV) -- Ignore unavailable to you. Want to Upgrade?

To: gloff who wrote (1228)	8/28/2000 7:01:36 PM
From: Allegoria	Read Replies (1) \| Respond to of 1801

Interesting mention of FFIV: smartmoney.com Good luck, Eric SIX STOCKS READY TO RALLY — AUGUST 2000 ADMIT IT. YOU WERE SCARED. The Nasdaq was down 37%, Microsoft (MSFT) was about to be chopped in two, and there was even talk of Cisco Systems (CSCO) being a house of cards. Worst of all, interest rates were going up — a lot. Federal Reserve Chairman Alan Greenspan's half-point hike in May was his sixth since June 1999. After all his confident talk of productivity gains and New Economy efficiencies, the chairman himself was acting like the worrier of old. The economy growing at 7% a year? That could bring on inflation. Time to hit the brakes! But then, how about that? The fog cleared. The darkness lifted. The Nasdaq returned to life. Could Greenspan have been...right? While it's still too soon to tell for sure, he actually may be on the money. Once again a soft landing — as in 1994, when Greenspan's last round of hikes allowed the economy to touch down nicely — could be at hand. There is no doubt that the data looks persuasive, with unemployment bumping up, and retail sales, housing starts and durable goods orders all on the wane. Finally, it seems, the voracious U.S. consumer is taking a breather. Six for a Soft Landing Assuming interest rates have peaked — or nearly peaked — these stocks ought to thrive: DOVER APPLIED POWER EMERSON ELECTRIC EXTREME NETWORKS F5 NETWORKS INGERSOLL-RAND F5 NETWORKS (FFIV) AS THE INTERNET becomes more densely populated, the problem of data networking has grown into much more than simply moving bits of data from point A to point B. Data are flying around the Web so fast that they can be piped to you from several different sites and over multiple pathways. How to make sure the site and pathway chosen are best? Enter F5 Networks. This Seattle company sells networking hardware that optimizes the way visitors reach Web sites. Users include popular destinations such as Nintendo's online store and clients of Web-hosting giant Exodus (EXDS). F5's product, the Big-IP, provides two important data-networking functions: traffic management and load balancing. As visitors hit a Web site, they request data that may be available on any one of several Web servers. Big-IP makes sure that no one server is overtaxed by the flood of traffic. At the moment, F5's stock is selling for 50 times next year's earnings. But the company's profits are expected to increase by more than 200% this year and 45% next year. As in most areas of networking, Cisco Systems (CSCO) is the competition. Its product, LocalDirector, is neck and neck with F5 in market share in terms of both units deployed (about 35% each) and revenue. However, Bob Lam, who tracks the company for Bear Stearns, maintains the upstart has the technological high ground. "While it can be cheaper to buy a switch from Cisco to do load balancing, the advantage with F5 is that many of the features go far beyond what a Cisco or Alteon WebSystems (ATON) box can do, including balancing traffic between different offices," says Lam. Microsoft, for instance, uses the F5 software to distribute traffic among different locations, he says. F5's strategic partnerships are key. While Cisco is also big in selling network switches and routers, F5 has been cutting deals with Cisco's competitors. It distributes the software code for load balancing and traffic management that ends up embedded in hardware — such as the switches built by another firm we profile here, Extreme Networks. F5 recently brokered an arrangement with Web service provider Akamai Technologies (AKAM) to build a special version of the Big-IP; it directs Web traffic to the part of the Akamai network that would be best for the Web surfer to visit. Big switch companies such as Cisco want to swallow up the functions of F5's products. So F5 must stay a step ahead by adding more functions to its appliances. And so far, it's been up to the task. In May it announced an agreement with hot startup Cacheflow that allows Big-IP not only to direct Web surfers to the proper servers but also to bump them to completely assembled copies of Web pages closer to the user. Those kinds of deals should set F5 apart, says Lam. "They've had a billion-dollar market based just on the [Big-IP]. With more product lines, they should be able to capture more dollars from each customer."