F5 Networks (FFIV), a once-and-future momentum favorite, plunges with the rest of the tech sector

05/24/2012 6:18 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

F5 Networks (FFIV) took it on the chin again today, falling another 7.9% on the day, to close at $108.56. The stock is now down a little more than 20% from the close on May 3.

Today’s damage was spill over, I think, from bad news from NetApp (NTAP), Hewlett-Packard (HPQ), and Dell (DELL) on weak information technology spending. After its earnings report yesterday for the quarter that ended on April 27, NetApp lowered its guidance for the first quarter of its fiscal year to $1.4 billion to $1.5 billion in revenue versus the $1.6 billion consensus. That seemed to confirm the weakness that Dell reported that same day. Dell missed earnings forecasts for the first quarter and then issued downside guidance for the second quarter on both revenue and earnings. Hewlett-Packard made it three-strikes for the tech sector when it announced that while it had come in above Wall Street earnings estimates for its fiscal second quarter, revenues had declined 3% from the second quarter of fiscal 2011 and that earnings for the fiscal third quarter would be 94 cents to 97 cents, below the Wall Street consensus of $1.02.

I’d just note for anyone interested in buying shares of F5 Networks, a stock that on its history I think you should expect to soar if this market ever decides to rally, that analysts seem to have just begun to cut their target prices. Deutsche Bank, one of the Wall Street companies out with a negative call on the stock today, cut its target to $140 from $150.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , may or may not now own positions in any stock mentioned in this post. The fund did own shares of F5 Networks as of the end of December. For a full list of the stocks in the fund as of the end of December see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

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