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Valuentum Weekly: Outsized Energy Exposure Continues to Buoy Newsletter Portfolios

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Image: Light crude oil futures once traded for roughly -$40 (negative $40) during the COVID-19 crisis, but have now rocketed to more than $120 in recent trading. Image Source: TradingView. This note was emailed to members Sunday, March 6, 2022. Markets   The S&P 500, as measured by the SPY, is down 9% year-to-date, a modest pullback, in our view, particularly in light of the fantastic performance the past few years. Though not necessarily welcome, a down year every now and then for the broader market indexes and a modest bear market can only be expected, at times. The Dow Jones Industrial Average, as measured by the DIA, is down more than 7% year-to-date (not too bad), while the Nasdaq–as measured by the … Read more

Our Reports on Stocks in the Software Security Industry

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Image Source: Martin McKeay Structure of the Software (security) Industry Participants in the software security industry focus on protecting important information wherever it resides—whether in servers, computers, mobile devices, or in the cloud. The space is intensely competitive, and some companies may offer their technology for free, engage in aggressive marketing, or pursue competitive partnerships. Firms also face indirect competition from application/operating system providers that may embed security solutions/functions in their own products. Participants must continuously develop new and enhanced services to meet changing customer demands. We’re neutral on the group. We’ve optimized our technology coverage universe. Software security firms can now be found here.

Verint Systems’ Strategy Delivers

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Image Source: Verint Systems Investor Presentation Actionable intelligence leader Verint Systems continues to deliver on its strategy in its ‘Customer Engagement’ segment, while its ‘Cyber Security’ segment is taking advantage of a number of trends. Management’s initial guidance for next fiscal year impressed. By Kris Rosemann Simulated Best Ideas Newsletter portfolio idea Verint Systems (VRNT) turned in a solid fiscal third quarter report December 6 as momentum stemming from investments in advanced analytics, automation, and cloud across its actionable intelligence portfolio are driving expectations for ongoing demand growth. Organizations need this actionable intelligence to create an engaged workforce and smarter customer engagements, and its cybersecurity business is taking advantage of the necessity for protection against ever-advancing cyber threats. Initial guidance … Read more

Hasbro, Boeing Pop as Market Bounces Back

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Image Source: US Missile Defense Agency. June 22, 2014 – The Missile Defense Agency’s Flight Test 06b Ground-Based Interceptor launches from Vandenberg Air Force Base, Calif. on June 22, 2014. The markets have finally been getting the volatility that we’ve all been waiting for, and we don’t like the idea that the market is now trading more like a cryptocurrency. Granted, it’s important to stay focused over a long-term time horizon, which irons out the ups and downs, but there’s just something about 1,000+ daily swings on the Dow Jones Industrial Average that really doesn’t sit well with us, regardless of what that implies with respect to the percentage change. Can you imagine — All of this over just a … Read more

Verint Systems: An Overlooked Idea on Cybersecurity

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Image Source: Verint The Best Ideas Newsletter idea is trying to break through the mid-$40s level, which has been illusive since late 2015. By Brian Nelson, CFA Verint Systems (VRNT) put up a very strong fiscal second-quarter (ended July 31) in early September when it beat bottom-line expectations by $0.14 and the top line by over $5 million. Not only did the top and bottom line come in ahead of expectations, but management increased its earnings-per-share outlook for the fiscal year ending January 31, 2018, to $2.75 at the midpoint. With shares trading at ~$40 each, that means Verint sports a multiple under 15 times current-year fiscal earnings, comparatively cheap (on a forward basis, the S&P 500 is trading over … Read more

Verint’s Cyber Intelligence Division Impresses

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Image Source: Blogtrepreneur One of the latest additions to the Best Ideas Newsletter portfolio experienced strong top-line growth in both of its operating segments during the first quarter, and we continue to like the company’s exposure to the cyber intelligence arena. By Brian Nelson, CFA Our thesis on Verint (VRNT) is unchanged after the company reported strong first-quarter 2017 results June 7 led by a Cyber Intelligence division that experienced revenue growth of 19% on a year-over-year basis. Verint is one of our favorite ideas to capitalize on the increased spending to prevent cybercrime. We do not expect to make any changes to our fair value estimate at this time, and we plan to continue to include the idea in … Read more

Podcast: Defense Spending and the Explosion of Cyber Crime

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The Valuentum analyst team discusses trends in US and global defense spending and the explosion of Internet crime that is fueling investment in cyber security both in the public and private sectors. ~7 mins. This podcast was originally published November 3, 2016. If you cannot view the video below, please view the transcript that follows or click the link here. Software – Security: CHKP, FEYE, FTNT, IMPV, PANW, PFPT, SYMC, VRSN Aerospace & Defense – Prime: BA, FLIR, GD, LLL, LMT, NOC, RTN Brian Nelson, CFA: This is Brian Nelson for Valuentum Securities, and today I have joining me on our podcast Mr. Kris Rosemann and Mr. Chris Araos. Today, we are going to talk about the landscape for defense spending … Read more

The Global Pandemic of Cybercrime, Cyber Espionage and Cyber Warfare

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“The new generation of cyber-attacks on organizations, including large and small enterprises and governments worldwide, is characterized by an unprecedented escalation in the complexity and scale of advanced malware created by criminal organizations and nation-states. These modern attacks are built on dynamic, stealthy and targeted malware that penetrates defenses in multiple stages and through multiple entry points of an IT network. These highly targeted, “single-use” cyber-attacks easily circumvent legacy security solutions that rely on pattern-matching detection technologies. Additionally, because legacy solutions reference outdated signatures of past threats, they also generate a high number of false-positive alerts.” – Fireeye Annual Report, 2014 The statistics are striking. According to a 2011 survey of ~580 US IT experts by research center Ponemon Institute, … Read more

Assessing Reactions to Trump’s Victory

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Image Source: Gage Skidmore Donald Trump will be the 45th President of the United States of America. Let’s dig into some of the reactions across the market. We’re keeping our cool. By Kris Rosemann and Brian Nelson, CFA The global markets often don’t know what to make of surprises, a characteristic that was on full display as news came rolling in that Donald Trump would soon become the 45th President of the United States, “trumping” Secretary Hillary Clinton in a decisive electoral college victory, despite the popular vote eventually going to the Democratic candidate. In the wee hours of the morning Wednesday, November 9, major markets across the globe were in shock, showing red almost across the board. At one … Read more

Volatility Spikes, Oh Cisco, the Mighty US Dollar, and More

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Image Source: CBOE Let’s talk about recent market events May 17. There’s a lot going on. By Brian Nelson, CFA It looks like volatility is back in a big way, with “all 29 volatility indexes at the CBOE ris(ing) today,” one more-than-doubling, the CBOE Short-Term Volatility Index (VXST). The ridiculously-named “fear gauge” or “fear index” or the CBOE Volatility Index, the VIX (VIX) leapt nearly 50%. On May 17, we effectively bought volatility intraday by adding put options to the newsletter portfolios, both on the S&P 500 SPDR (SPY) and Netflix, a company whose valuation we think remains ridiculous. We may continue to add put options on entities whose equity prices we believe have become too stretched, positions that may … Read more