My Stock Winners

Juniper is probably my favorite company in the networking equipment segment.

On Thursday, Juniper (NASDAQ: JNPR) reported its results for Q4 and fiscal 2007 that ended December 31, 2007. Q4 revenue was $809.2 million, up 36% y-o-y and 10% sequentially. GAAP net income was $122.9 million or $0.22 per share on a diluted basis, up 73% y-o-y and 44% sequentially.

For the fiscal year 2007, revenue was $2.84 billion, up 23%. GAAP net income was $360.8 million or $0.62 per share on a diluted basis, compared with a GAAP net loss of $1,001.4 million, or $1.76 per share for 2006. Its headcount increased by 218 employees to 5,879 compared to Cisco’s (CSCO) 63,050. I like the fact that the company grows without hiring ridiculous numbers of people.

Segment-wise, in 2007, infrastructure segment grew 24% to $1.8 billion, Service Layer Technologies [SLT] segment grew 20% to $574 million, and the services segment grew 24% to $509.1 million. In Q4, infrastructure revenue was $500 million, a strong growth of 42% y-o-y and 8% q-o-q, which was led by strong sales in the T, M, and MX series. SLT finally attained its profitability target with a profit of almost $8 million on product revenues. SLT revenue was $168.4 million, up 29% y-o-y and 19% q-o-q. Service revenue was $140.4 million, up 25% y-o-y and 9% q-o-q.

Region-wise, the Americas accounted for 47.5% of total revenue in Q4 versus 47% in Q3. EMEA accounted for 33.6% revenue, compared to 32.5% in Q3. Asia Pacific accounted for 18.9% revenue, lower than 20.5% in Q3. It had 54.6% share of the Taiwan carrier-class core router market in Q3 07, up from 45% last year.

The growing Internet traffic and the online video trend have seen Juniper, as well as Cisco doing well in 2007. According to a recent Synergy Research Group report, it gained 1.7% share in 3Q07 in the Carrier Ethernet market while Cisco’s share grew by only 0.6%. Although Cisco dominates the router market with 66% share and Juniper has just about 15%, it is nevertheless a significant gain for Juniper. In the core router market in which Juniper has 30% share and Cisco 60%, Juniper gained 16% compared to the last quarter. Wow!

Juniper is phasing out its DX product line over the next five years. There is also speculation that Juniper will soon be launching it’s first-ever enterprise Ethernet switch. Cisco leads in the enterprise Ethernet switch market with 71% market share, and ProCurve is second with 10%. Enterprise switching would be an important addition to its portfolio in order to become more competitive with Cisco.

For 2008, Juniper expects revenues between $3.4 and $3.55 billion with EPS between $1.08 and $1.13. For Q1, revenue is expected between $810 and $820 million, and EPS is expected to be between $0.24 and $0.25.

Its shares have increased about 30% in 2007. The company’s stock is currently trading around $27 and its market cap is around $14 billion. In the conference call, Chief Executive Scott Kriens seemed unfazed by economic slowdown citing that spending on strategic IT projects is not likely to be reduced.

Courtsey of S Mitra

Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

========= Undervalued Stock #1 ==========

Juniper Networks, Inc. engages in the design, development, and sale of assured Internet Protocol (IP) secure networking solutions primarily in Americas; Europe, Middle East, and Africa; and Asia Pacific. Its solutions are incorporated into the global Web of interconnected public and private networks across various media, including voice, video and data, and travel. The company’s network infrastructure solutions enable service providers and other network-intensive businesses to support and deliver services and applications on an integrated network. Its infrastructure product family consists of M-Series and T-Series, and E-Series products. The company’s service layer technologies (SLT) provide network security solutions; and enable customers to provide additional IP-based services and enhance the performance and security of their existing networks and applications. The SLT product family comprises firewall and VPN systems; firewall and VPN appliances; SSL VPN appliances; IDP appliances; application acceleration platforms; unified access control; and AAA and 802.1X products. In addition, the company offers technical assistance, hardware repair and replacement parts, unspecified software updates, and professional and educational services. Its customers include service providers, such as wireline, wireless, and cable operators, as well as Internet content providers; enterprises; governments; and research and education institutions.

—— Juniper Networks, Inc. (JNPR) —–
If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNPR.

After hitting a one-year high of $37.95 in October/2007, JNPR has declined over the past month. JNPR opened this morning at $24.5. So far today the stock has hit a low of $24 and a high of $25. The chart for JNPR looks neutral and improving, while S&P gives the stock a 3 STARS (hold) rating,

JNPR has a current Value of $30.74 per share

Value: Value is a measure of a stock’s current worth. JNPR has a current Value of $30.74 per share. Therefore, it is undervalued compared to its Price of $25.61 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock’s Price and Value always will converge.

RV (Relative Value): RV is an indicator of long-term price appreciation potential. JNPR has an RV of 1.45, which is excellent on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.

To be Continued….
(Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

The Weekend Edition: Rich Families Getting Richer

The numbers of millionaire households globally grew by 14% in 2006 from 2005 and now control a third of the estimated $100 trillion in wealth, a new study by Boston Consulting Group released. These 9.6 million families, comprising 0.7% of world’s households, now control some $33.2 trillion, the BCG study found. About half are located in the United States and Canada, a quarter in Europe and a fifth in the Asia Pacific region. The study, seventh in a series, found that assets held by non-wealthy households (defined as those with less than $100,000 in financial assets) declined slightly from 2001 to 2006. Yet assets held by households with more than $100,000 climbed from $51.4 trillion to $84.5 trillion during the same period.

The study attributed wealth gains mainly to two factors: increased savings and market gains for stocks, bonds and cash, reflecting wealth managers’ long term view that market investments are a key factor in building wealth. The study found that overall global wealth grew 7.5% in 2006 to nearly $100 trillion, the fifth consecutive year of expanding wealth. The study is the latest to quantify a continued widening of the global gap between rich and poor, with the rich getting richer by saving and investing more.

How Successful Traders Think
When Dr. Brett Steenbarger talks with traders, he can often sense within the first few minutes of conversation whether the trader is successful and talented or not. What hits him is identifying, consciously, how he was arrives at that assessment. Here’s a parting thought from Brett Steenbarger: “The really good traders tend to have differentiated market views. Their thinking is of a higher order of complexity. So, for example, they may be bullish on certain themes, bearish on others. They like some stock market sectors, avoid others. They see in range bound terms sometimes, trending on other occasions. The really good traders see a large playing field. If they see a weak dollar, they think about how that affects bonds, metals, energy, and international returns. If they see a breakout from a multiday range, they see a swing move in the making, not just an opportunity to make a few ticks. They see how markets are interconnected. They see how the morning trade relates to the overnight range, and how today’s trade is connected to what we did yesterday.
And the less successful traders? They’re bullish or they’re bearish. That’s it. They think in simple terms of causation: We’re having a housing slump; that means we’ll have a bear market. We’re making new highs; that means we should buy because we’re in an uptrend. The news is good, so we’ll buy. The news is bad, so we should sell. No complexity. Sadly, we see much of that kind of thinking in the financial media. Jean Piaget, a developmental biologist, emphasized that cognitive development occurs through a process of assimilation (taking in new information) and accomodation (integrating that new information with what we already know). Over time, that enables us to develop increasingly complex (and accurate) models of the world. I strongly suspect that process is at work in the development of successful traders.
We often hear advice to the effect that traders should keep things simple. Complexity for its own sake is not helpful in the least. Still, when I talk with successful traders, I am impressed by the relativity of their views: they look at how this is related to that and how they can profit from the relationship. It may be a simple relationship, but it’s not simplistic. The difference is important.”

What to invest?
Short Amazon (AMZN)
http://www.mystockwinners.com/the-best-time-to-short-amzn-is-now-%e2%80%9318/