Riverbed Up 10% on an Upgrade Is the Tech Leader

Riverbed Technology (RVBD) is up strongly today and it appears to be due to an analyst report from Think Equity

• Riverbed (RVBD) shares are sharply higher today after ThinkEquity analyst Jonathan Ruykhaver today raised his rating on the company to Buy from Accumulate, while maintaining his $48 price target.
• Ruykhaver writes that “the WAN optimization secular growth remains strong and Riverbed’s product market leadership appears intact.” He adds that he is encouraged by the company’s “commitment to invest in growth while also targeting operating margin expansion in 2008.” He sees potential earnings upside, and advises that investors should buy the stock at current levels.

This reverses a call made in mid October when the stock was $47, and he downgraded on valuation. Finally, an analyst who makes sense with good timing....

I continue to love this space with Riverbed Technology (RVBD) and Blue Coat Systems (BCSI) but they seem to get lumped in with Cisco Systems (CSCO) and persistent fears of 2008 slowdown in corporate spending seems to dog these stocks. I did cut back a bit on my position today on this strength in Riverbed, about 18% of my position and this takes Riverbed Technology back down to a 1.9% type of position for the fund.

Despite the horrendous fall in the stock price, I am booking profits during good times and averaging down in the mid $20s range - after today's 10% rise the stock is now "only" at a 4% loss for the fund. Until the space shows material signs of weakness, I will continue to hold these names, although investors have truly trashed the stock(s). I do like Riverbed as the technical leader (although richer in valuation) and Blue Coat as the 'value' play in the space.

Long Riverbed Technology, Blue Coat Systems in fund; long Riverbed Technology in personal account

Comments

[Dan Jacome:]

RVBD - 15% after Q4 EPS....they are cutting prices to lock in share, stock is down hard in last couple of months....stock went from 50 to 19 in a hurry, avoiding it for now.

2008 Feb 05 06:04 PM

[Dan Jacome:]

RVBD - 15% after Q4 EPS....they are cutting prices to lock in share, stock is down hard in last couple of months....stock went from 50 to 19 in a hurry, avoiding it for now.

2008 Feb 05 06:04 PM