F5 Networks

01/16/2015 7:00 am EST


Richard Moroney

Editor, Dow Theory Forecasts

Our favorite speculative idea for 2015 is a maker of equipment and software for computer networks, suggests Richard Moroney, editor of Dow Theory Forecasts.

F5 Networks (FFIV) only earns a Value rank of just 49. We are willing to overlook that middling valuation, given strong trends elsewhere.

The Overall score, currently 93, has exceeded 90 for 12 straight months. For fiscal 2014 ended September, sales rose 17% and free cash flow 11%.

Management seeks to expand its modest market share in security products, which should drive growth in fiscal 2015.

One or more security products were included in 36% of F5's product sales in fiscal 2014, up from 30% a year earlier.

The consensus projects 17% higher per-share profits for the year ahead, compared to the industry's median estimated growth of 8%. F5 is a Focus List Buy and a Long-Term Buy.

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