The kind of stocks that deserve to be in every aggressive portfolio should be those companies experiencing upward price momentum and have projections of double digit growth in both sales and earnings. Check Point Software Technologies (NASDAQ:CHKP) is that kind of company. If you were lucky enough to have owned this stock over the last 5 years you enjoyed a 245% return on your investment. The 5 year weekly price chart provided by Barchart shows how strong the price persistence has been:
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Check Point Software Technologies Ltd. develops, markets, and supports a range of software, and combined hardware and software products and services for information technology (IT) security applications worldwide. The company offers a range of network and gateway security solutions, data and endpoint security solutions, and management solutions. Its network security gateways enables its customers to implement their security policies on network traffic between internal networks and the Internet, as well as between internal networks and private networks that are shared with partners. The company's endpoint security solutions provide various software blades that run on individual computers connected to the network, such as desktop computers, laptop computers, and other mobile devices. It also offers technical services consisting of technical customer support programs and plans, such as enterprise based support and collaborative enterprise support; certification and educational training on the checkpoint's products; and professional services in implementing, upgrading, and optimizing checkpoint's products, including design planning, security implementation, and project management services.
In addition, the company offers ZoneAlarm solutions that protect consumers from hackers, spyware, and identity theft. It sells its products and services through a network of channel partners, including distributors, resellers, value-added resellers, system integrators, and managed services providers to enterprises, service providers, small and medium sized businesses, and consumers. The company was founded in 1993 and is headquartered in Tel Aviv, Israel.
Factors to consider:
Barchart technical indicators:
- 88% Barchart technical buy signals
- Trend Spotter buy signal
- Trading above its 20, 50 and 100 day moving averages
- Made 6 new highs and is up 3.52% in just the last month
- Relative Strength Index is 63.37% and rising
- Barchart computes a technical support level at 55.09
- Recently traded at 59.66 with a 50 day moving average of 54.35
- Wall Street brokerage analysts are very high on this company
- Analysts predict sales will increase by 13.20% this year and another 10.90% next year
- Earnings are estimated to increase by 13.70% this year, an additional 11.30% next year and compound an an annual rate of 11.54% for at least the next 5 years
- The robust projections resulted in analysts issuing 11 strong buy, 8 buy, 8 hold and no under perform or sell recommendations
- These number should be pretty reliable because over the past this company has enjoyed great earnings predictability with few disappointments
- A+ financial strength ratings
General investor interest:
- The readers of Motley Fool are just beginning to find this stock and those that have voted 94% that the stock will beat the market
- The more experienced All Stars voted 96% for the same result
- Fool notes that 19 Wall Street columnist have written about CHKP and 95% of their articles have been positive
Competitors and sector leader:
It's always good to see how your stocks price is holding up against its major competitors and over the last 12 months while Check Point Software (CHKP) is up 55% along with Fortinet (NASDAQ:FTNT) up 56%, the others like Cisco (NASDAQ:CSCO) were down 24% and Juniper Networks (NYSE:JNPR) down 30%:
Check Point is a member of the SIC 7377 Pre-packaged Software sectors and some other stocks have flown off the charts like Majesco Entertainment (NASDAQ:COOL) up 440% in the past 12 months and Egain (NASDAQ:EGAN) up 393%, Broadsoft (NASDAQ:BSFT) up 303% and Opnet Technologies (NASDAQ:OPNT) up 110%:
Summary: Price momentum can't be justified unless there are positive projections for increases in both sales and earnings. Check Point Software Technologies (CHKP) has it all - Consistent and steady price momentum with a following of both professional and individual investors projecting double digit growth in sales and earnings. Put this one on your buy lists.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.