Internet Security Software: Spotlight on Aladdin

| About: Aladdin Knowledge (ALDN)

On December 11, The Wall Street Transcript interviewed Daniel Ives, a vice president and enterprise software analyst at Friedman, Billings, Ramsey Group, Inc. Key excerpts on his small cap favorite follow:

TWST: What's at the top of your favorite list at this point?

Mr. Ives: On the large cap side, our favorite name is McAfee (MFE), and on the smaller cap side, our favorite name is Aladdin (ALDN).

TWST: What's [Aladdin's] competitive edge in the space?

Mr. Ives: They've been doing it longer. They have a lot of IP technology, which differentiates them, and a lot of it really comes down to marketing and the customer base. They have a large installed, diversified base, and over the years, they've had very good execution with some soft spots.

TWST: Where is the stock and what's your target?

Mr. Ives: Aladdin right now is at $17.96, and we have a $22 price target.

TWST: Are there any near-term catalysts?

Mr. Ives: No, it's just about execution. I think the glass is still half empty on Aladdin. As they continue to execute, that's when investors will start to believe more in the story.

TWST: Why do you say the glass is still half empty?

Mr. Ives: Because they've had some execution shortfalls. They had a disappointing June quarter. Even though September was an in line-ish quarter, investors have not forgotten some of their stumbles - not just from June, but over the past few years. So it's not just one quarter. They have to put together a string of quarters in order to get investors back to the story.