Cyber security has been a priority investment for CIOs for at least the better part of the last decade. And cyber security stocks have commanded high valuations for at least as far back as that and perhaps longer. Companies in the space have seen their growth trajectories respond to vigorous demand and a perception that growth in demand is infinite. In addition, the space has "benefited" from loads of both hype (so-called broker babble) and news stories that have suggested that data security remains challenged and that the world is in the midst of a hacking epidemic. The entire space has evolved dramatically since the first companies selling primitive firewalls such as Check Point (NASDAQ:CHKP) emerged more than two decades ago.
It would be impossible in an article of reasonable length to comment on all of the public cyber security names. There are literally dozens of companies in the space that are public and more than a few subscription services that purport to tell investors which shares to own and which shares to avoid. Clearly, the two top companies in what is called the network security space at this time are Fortinet (NASDAQ:FTNT) and Palo Alto (NYSE:PANW). Check Point is still the largest company in the space but is not really in the same category because of significantly different technology and a much muted growth rate trajectory. And for some analysts, it would be hard to ignore Symantec (NASDAQ:SYMC), which through its Norton operation plays a major role in the desktop security market and is well known by most American PC users. But in this article I'm going to focus on Fortinet and Palo Alto which are much closer analogs. I thought it might be interesting to delve into both companies a little further both in terms of their growth prospects and competitive positioning. More importantly, however, I wanted to explore the viability of both companies as potential investments and try to compare and contrast their strengths and weaknesses.
Like most stocks in the IT space, both Palo Alto and FTNT opened the year up poorly. Fortinet fell by about 25% to its trough on February 12th and, of course, the shares had been down before that. At the moment, Fortinet's shares have retraced most of that move, partially on the back of a well received earnings report, but the shares are still down by nearly 40% since their high of last August.
Palo Alto's shares have a high valuation and have fostered loads of controversy because of that valuation. The shares fell by 35% to start the year and have since recovered by 29%. Of course, that still leaves the shares down by 23% since their peak in early December.
One way to invest in the space if you don't want to do your own work is to use a service such as Motif which has built a reasonable basket of names in the space. In fact, 28% of the weighting in the Motif cyber security basket consists of Palo Alto (18%) and Fortinet (10%). But if you have read this far, you probably are an investor who likes to do your own stock picking. This is not a space for the faint of heart or the unwary. Even the Motif basket of cyber security names is down about 10% year to date, far worse than the performance of the broad indexes but quite a bit better than you would have done owning Palo Alto over the past two months.
The shares of cyber security companies are almost never cheap except when they either blow up or mature. No one has ever accused PANW's shares of being on sale or a great bargain. Based on traditional metrics, PANW is one of the most highly valued of the names that I have ever followed. Fortinet is cheaper and has enjoyed less growth. Vanilla and chocolate or vanilla and something much less palatable - say kale. (Yes I know kale is healthy for you, but it simply doesn't taste good.) I think anyone who wants to invest in the information technology space in a methodical fashion on more than a technically driven basis will ultimately decide that they need to invest in a cyber security name or two. Let's see if there are some underappreciated positives or less appreciated risks to the outlook for these names.
This is not intended to be a comprehensive discussion of the cyber security industry. But I want to present just enough background so that the reader can get a sense of what is hot and what is obsolescent and why that is so and what might be changing. The problem of cyber security dates to the rise of the internet. In the late 1980s, only 50,000 devices were connected to the internet and most of those were mainframes, minicomputers and other kinds of professional workstations. Late in 1988, the performance of many of these systems began to slow inexplicably. It was discovered that a computer worm had been introduced into the internet that demanded processor time. The introduction of the worm was traced to a 23-year-old graduate student at Cornell University Robert Morris who said he was trying to count the number of devices attached to the internet. He was sentenced to probation and 400 hours of community service. He went on to found an online store and later founded a small venture capital firm for the internet. He has became a Professor at MIT where he teaches Electrical Engineering and Computer Science.
While the first hack was apparently a research project, over time hacks increased, professional criminals arrived on the scene, and computer professionals were recruited to become a part of organized and systemic attacks on networks. Some time during the 1990s, the first hacks against national security installations apparently took place.
As the internet got larger and threats became more common, companies arose to protect users from the threats. Among the first of these start-ups was Check Point Software which was founded in Israel in 1993. As opposed to companies specializing in anti-virus solutions that are mainly sold to consumers, Check Point was always built around network security and the company's first product was a network firewall. Check Point introduced a product called VPN-1 a few years later which is both a firewall and a filter and was said to be the first commercially available software firewall that used stateful inspection. After all these years, the company is still the market share leader in the firewall space. Last year, IDC said Checkpoint continued to have a 23% share in the space. (It needs to be noted that definitions in this space are really fluid and not very homogeneous. CHKP is said to be number one in firewalls and second place in network security. Go figure.)
Meanwhile, as PCs proliferated with the development of Windows, something called the Stoned Virus became a frequent pathogen in corporate IT departments. Users obviously would exchange data between their systems and spread the virus accidentally. A group of developers founded what was called the "Virus-L." This group had a mission to help update users about security and to share information to help remove viruses. Membership in the group included John McAfee and Eugene Kaspersky. Both of these men went on to start their own companies to sell anti-virus software. At about the same time, another entrepreneur named Peter Norton launched his own anti-virus company that was bought by Symantec a year later. Norton, McAfee and Kaspersky remain significant competitors in the anti-virus space.
These days, the market for anti-virus software has changed tremendously and the leading vendors are Avast, a Czech software developer, and Microsoft (NASDAQ:MSFT). Collectively, Avast and Microsoft today hold a 40% share of the anti-virus market, with Symantec/Norton in fifth place with a 7% share, McAfee - now a part of Intel (NASDAQ:INTC) - in sixth place with a 6% share and Kaspersky Labs, which is headquartered in Russia, holding a 3.5% share.
Obviously, the proliferation of the internet was what really enhanced the growth of both the hacker community and the growth of solutions to thwart hacks. Just a few famous attacks of that era were "Michelangelo," "Concept," "Anna Kournikova" and Melissa. The hacks are designed to profit the hacker for the most part by gaining access to secured data which is then used in identity theft.
Given the size of the market and how security basically touches all phases of the IT ecosystem, it is not surprising that the market has attracted the attention of major companies. IBM (NYSE:IBM) has been building its security stack with what can best be called mixed results for more than a decade. Seeking Alpha contributor Dana Blankenhorn recently wrote an interesting article about what he believes to be IBM's game changing acquisition in this space. Cisco (NASDAQ:CSCO) has been building out its security capabilities through solutions that reside in its routers and switches, for the most part. It recently bought a point provider SourceFire for $2.7 billion. Juniper (NYSE:JNPR) bought an early security company called NetScreen for $4 billion and basically ran it into the ground. Intel purchased McAfee a few years earlier for more than $7.7 billion. When evaluating the shares of security companies, I think it is important to note that at some level there is a kind of implied put. If the valuation gets low enough - and I can't say what low enough means - then there is a high probability that the particular company will get bought.
In trying to evaluate the market size and shares of the competitors, there are loads of market share statistics to pick from. At the moment, it appears as though Cisco has the greatest market share followed by Checkpoint, Palo Alto and Juniper. Cisco picked up quite a bit of market share when it acquired SourceFire. I believe that since that time, Cisco has probably returned to its former status of market share donor. I wouldn't be surprised if current market data, which gets released next month for 2015, wouldn't show Palo Alto now in second place followed by Fortinet. But no one has a commanding share. Cisco only has a market share of 35% in one of the studies and "Other" has a market share of 23%. Juniper, with a market share of around 7%, will probably continue to be a market share donor and even Check Point is likely to grow slightly less rapidly than the total market, in my opinion.
Overall, the growth of the network security market is expected to be in the range of $9-10 billion in 2016. That growth rate is probably quite low compared to what many readers might have guessed, but network security is just one part of the cyber security market. There are many different versions of what constitutes "the cyber security market." Depending on the source that one uses, the overall market is supposed to be between $75 billion and $110 billion, with growth rates estimated to be between 5%-10% by most of the respected market research analysts. One thing that is obvious is that overall cyber security spend is growing far more rapidly than overall IT spending.
I think those growth estimates are almost certain to prove quite conservative. There is one reason for that and it is that cyber attacks are thought to be costing business between $400-$500 billion/year. The payback for increased security spending is potentially far higher than adding an update to one's installed ERP system.
One very large investor has recently stated that "given the ongoing evolutionary nature of cyber attacks, coupled with the relatively low share of total IT spend security accounts for, we believe industry growth rates will remain stronger than industry forecasts." Columbia-Threadneedle, the source of the above quote, is a well-respected investment management behemoth and their argument really makes sense. Using CIO surveys to project growth is the traditional way of providing growth estimates. I believe, however, that in this instance growth is going to come because CEOs and CFOs are being stung by network breaches and order CIOs to spend more and to make security a priority. Columbia is projecting market growth at between 10%-15% which makes far better sense to me than the 5%-10% projections of the market research firms.
If there are conclusions to be drawn from the commentary above, it is that cyber security is a large and growing part of the IT world and that investments in network security vendors are probably among the best place to invest over the next five years. With both Palo Alto and Fortinet growing their market share significantly at the expense of the other vendors in the space, it seems obvious that focusing on these two vendors is the most likely way to achieve profits in this space.
"Mr. Market," in words that some Seeking Alpha writers like to use, has got it right. One should be willing to pay premium multiples for participants in the space - the question then becomes how large premiums should be.
So I will turn my attention here to considering the two fastest growing vendors in network security, Palo Alto and Fortinet. There is, of course, a third independent runner in this race, Check Point Security, but it has such different growth prospects and financial characteristics than its competitors that I shall write about it separately.
Palo Alto Networks
Palo Alto was founded in 2005 by Nir Zuk. Mr. Zuk is considered one of the industry visionaries and Palo Alto is a product of his vision. Zuk was the principal developer of the stateful inspection firewall and the first to create an intrusion prevention system. (For those interested, a stateful firewall is a firewall that tracks the operating state and characteristics of the different packets that traverse it. It knows that some kinds of data can only go to finance and other kinds of data can only go to marketing, but the CEO can get all the data he or she wants.)
Palo Alto has occupied one of the highest positions in the Gartner Enterprise Firewall analysis since the category was initiated in 2013. The company has never achieved non-GAAP profits and on current trends that attainment should not be expected any time in the near future. That being said, the company's non-GAAP profits are growing very rapidly with current estimates calling for non-GAAP EPS of $1.67 in the current fiscal year (ends 7/31) which is up from $.86 in the previous year. They are forecast to reach $2.60 in the year to July 2017. Given how this company is run, the key metrics in evaluating its success are growth in billings and growth in cash flow. In the last quarter, Palo Alto overattained on revenues and bookings compared to the prior consensus. Current analyst estimates call for more than 47% revenue growth to $1.37 billion in the current fiscal year followed by growth of about 35% in fiscal 2017 and an additional 30% growth expected in FY 2018. I will explore the financials in a little more depth later on. But the key questions one needs to resolve are: a) what is this company's secret sauce? b) Is its technology unique? c) Is its technology moat defensible? and d) can it run its business to produce substantial cash flow and that will ultimately produce returns for investors?
I don't think that Palo Alto's secret sauce is much of a secret at this point. The company developed a platform that integrated the three major components of a security stack these days, which include the "Next Generation Firewall," Advanced Endpoint protection and Threat Intelligence Cloud. What is different about what Palo Alto does is that all of the functionality was natively built into the platform and that allows the Palo Alto appliance the ability to deliver highly automated preventive measures. The point providers, of which there are many, simply do not do as good a job in preventing breaches. I think that most observers familiar with the technology would say it is the platform and the functional integration and the scalability that this company provides that sets it apart from the other companies in this space.
Most of the company's large competitors such as Check Point and even Cisco have a huge investment in legacy technology. And loads of users will continue to buy legacy technology for years to come because they too have lots of legacy technology deployed. Most users hate ripping out and replacing what they have already paid for. But customers who have suffered significant economic losses because of a breach often find themselves forced to buy the most effective systems, regardless of the cost. Most unbiased observers seem to feel that what Palo Alto offers is the most effective solution, particularly for the largest users on the market these days, although Fortinet has made strides in their ability to deliver enterprise products.
I think then that the major issue for investors to determine is whether some new participant might come up and match the company's capabilities. And the simple answer is - probably not, because the costs of building a new platform and abandoning the investment in prior systems would simply be too great for most of the current vendors. Sooner or later there is likely to be something revolutionary that comes to market similar to next generation firewalls and the integrated platform that Palo Alto offers. I have no real idea of what that might be and by definition very few people are able to forecast Black Swans. But within the security business as it is presently constituted, I think that Palo Alto will successfully defend its technology moat.
That doesn't mean that there won't be other vendors of platforms competing against PANW. Indeed, Fortinet has a platform and most of the other vendors in the space have something that they call a platform. But not all platforms are created equal, and I expect that Palo Alto will continue to enjoy some definable product advantages in the foreseeable future. I expect that PANW will continue to win the majority of the competitive engagements in which it is involved.
The final issue and the most contentious one I suspect is the question of the company producing a reasonable return for investors. I acknowledge that there are going to be differences of opinion on this point and those differences will not be those that my poor tongue is likely to resolve. Once again, we are dealing with a company that uses a subscription model for a significant proportion of its revenues. So, issues of deferred revenue and customer retention or churn are considerations.
At this point, I will just present some facts and take up my conclusions in the next section. PANW has never been GAAP profitable and GAAP profitability is years off. Many readers will doubtless stop reading - but that is the way this company's business model works. The company's GAAP loss was $62.5 million last quarter and stock-based compensation expense net of the tax adjustment was more than $100 million. There is a huge amount of operating leverage in the company's model but most of that leverage is absorbed by the rapid growth in deferred revenues that is driven by the company's subscription model. The increase in deferred revenues was $215 million over the past six months compared to $113 million in the year earlier period. As a result, operating cash flow was $300 million for the six-month period which is almost double the $151 million recorded in the prior fiscal year. To be sure, stock-based compensation is rising fast as well, but at $175 million it is 58% of reported cash flow. In the prior fiscal year, stock-based comp was 63% of reported cash flow.
In the past, the company had articulated a goal of achieving 40% free cash flow margins. Obviously, it has achieved that goal at this point as cash flow for the six months was 47.5% of revenues and free cash flow slightly exceeded 40%. As subscription revenues are likely to grow faster than traditional on premise revenues, I imagine that the growth in operating cash flow and cash flow margins will continue to rise at least for the next few years. I also think it is worthy of note that this company pays and expenses 100% of sales commissions when it bills for an order. With the switch toward subscription-based revenues, that policy puts significant pressure on reported current period margins. It is this mis-match that has driven the company to reduce its reported operating margin guidance by 400-500 bps to a range of 18%-19% as its current fiscal year exit margin target.
I will finish this section by cribbing a little from the CEO's answer to a question on the last quarterly call. He said that the net quarterly revenue additions for the leading five competitors in the space (network security) was $300 million. And Palo Alto got $120 million of that net add leaving the balance to be divided up amongst the other four competitors. Given how much Fortinet grew in that period, it is pretty obvious that both the company and Palo Alto are increasing their market shares at the expense of the other vendors in the space. And I think the reason is pretty simple - Palo Alto simply offers a better solution for users. The company claims that it has a lower total cost of ownership than its rivals. I don't want to take that up here. But what is obvious is the platform approach is a far more efficient and effective way of handling security. I will try to address valuation a bit later - but I think in the IT business companies that are enjoying market share gains and that have operating leverage wind up doing reasonably well as investments.
Fortinet suffers from one rather significant problem. It is always going to be compared to Palo Alto and it probably is always going to come out on the short end of that comparison. Fortinet was founded by Ken and Michael Xi in 2000. It is now about 80% the size of Palo Alto. Ken Xi was one of the first developers of software based firewalls, and when he realized their limitation, he started a company NetScreen to develop what today are called security appliances. NetScreen was ultimately sold to Juniper, which proceeded to waste its first mover advantages, although Juniper continues to operate in the network security space. The Xi brothers started Fortinet on just a $1 million angel investment and have achieved significant success over the years. Fortinet has made some acquisitions along the way, including most recently the purchase of Meru, a struggling provider of wireless local area networks to healthcare, hospitality and education markets. Meru was supposed to do $80 million in revenue last year before it was acquired which would be a significant amount when looking at Fortinet's growth over the past 12 months. In the last quarter, Meru contributed 6 percentage points to the 35% billings increase in the period. Meru has continued to shrink since it was purchased by Fortinet as its run rate revenues are now $65 million. The synergies between Meru and Fortinet are not entirely clear to me.
Much of the technology foundation for Fortinet's current products still consist of the ASIC-accelerated performance that Ken Xi developed back at the dawn of the network security business. Although Fortinet has an integrated suite of solutions whose products probably match in aggregate everything that is done by the Palo Alto platform, the key differentiator is that FortiGate, the company's flagship solution, is not quite yet a platform into which a user can seamlessly plug in extended capabilities.
It would, no doubt, be simpler if one could turn to a market intelligence source to get a description of the precise differences between what FTNT offers and what Palo Alto offers. I believe, however, that most observers think that the automation in network services inherent in the PANW platform provides it with an excellent total cost of ownership argument that is a singular part of that company's sales success against Fortinet and all other competitors.
Similar to Palo Alto, this company uses a hybrid SaaS model. Therefore, at least for this writer, more critical metrics to look at are billings growth and deferred revenue growth. Organic billings growth in the last reported quarter was 29%. That is certainly not a bad performance, although noticeably slower than the growth achieved by Palo Alto. Deferred revenue growth for Fortinet organically was 39%, again a very strong numbers, just not quite as strong as Palo Alto achieved.
This company appears to be less profitable at this point than Palo Alto. Recollect that PANW had a 47.5% operating cash flow margin for its last reported quarter. This company has an operating cash flow margin for the comparable period of 23%. Neither Palo Alto or Fortinet sustain a high level of capital expenditures. Free cash flow is about 85% of operating cash flow for both companies.
When companies have little cap ex to make and are cash flow positive, then cash piles up. Relative to its size, this company has a huge level of cash and equivalents on its balance sheet. At the end of last year, the cash balance was close to $900 million, up by close to $200 million from the prior year after paying for the $44 million cost of buying Meru.
Stock-based compensation represents 42% of cash flow for this company compared to 58% at PANW. In the prior year, stock-based compensation was 49% of operating cash flow. The non-GAAP tax rate for Fortinet is about 35% compared to a tax rate accrual of 38% for Palo Alto. The percentage of revenues coming from services for this company is slightly higher for this company than for Palo Alto but services are growing roughly in line with product sales for Fortinet. This company has seen a slight increase in gross margins this past year from 72% to 71%. Palo Alto's gross margins were 72% last quarter down from 73% in the prior year period. Overall, Fortinet has a GAAP operating margin of 4% compared to a GAAP operating loss of 16% for Palo Alto. Again, this company focuses on non-GAAP margins that are close to 15% and are forecast to rise by 1 percentage point each year until it reaches a goal of 20% in 2020.
There are some investors who are far more concerned about GAAP margins than this writer. I think the operating cash flow margin difference, which is weighted in Palo Alto's favor, is far more significant. Palo Alto deferred revenues and bookings are growing faster than Fortinet's and the anomaly by which Palo Alto records a full sales commission on bookings accounts for some but not all of the difference in GAAP operating margins.
Fortinet's products were originally aimed at the mid-market and its revenue mix continues to be far more weighted to the mid-market when compared to Palo Alto. Last quarter about 58% of the company's revenues were derived from entry level and mid-market products. The company is targeting to expand the proportion of revenues coming from its high-end systems and has been successful in that effort. The company's newest products are closer to the platform approach that undergirds the Palo Alto offerings.
The company is now projecting bookings growth of 23% for this year (2016), which is significantly below the bookings growth of about 40% for the comparable period forecast for Palo Alto. I would think that most observers expect Fortinet to exceed that forecast. The company does not forecast cash flow, but it does forecast about a 1% growth in non-GAAP operating margins. Since revenues and bookings are expected to grow at comparable rates this year, I would imagine that cash flow performance will follow the performance of operating margins.
Valuation and Investment Cases
No one is ever going to confuse either Palo Alto or Fortinet with value names or even GARP names. They are substantial companies followed by 40 and 29 analysts, respectively. In this economy, revenue growth of 23% is good and revenue growth of 40%-plus is spectacular. I'm not sure just how many companies there are with greater than $1 billion in annual revenues growing at greater than 40%. There still remain growth stock investors, and with the very slow growth rate in the global economy, they have less to buy. So both of these names have what I might term a scarcity value.
Further, it is noteworthy, I believe, that neither of these companies has seen any particular pressure from the deterioration in overall macro conditions. Palo Alto's management went out of its way to suggest that January, the third month of its just reported quarter, showed normal linearity with the first two months of the quarter. Fortinet, which has a significantly elevated international presence and sells to lots of SMBs, supposedly both risk factors in this economy, said it had seen no recent pullback in demand for its products in that market despite what other vendors in the IT world have suggested. So, no cyclicality is visible and growth is continuing at outstanding levels. Of course, these names are going to be expensive.
PANW is selling at 7.6X EV/S based on revenues for the current year. I think if one looked at bookings as a better proxy than revenues for the overall size of this business, the ratio would be about 6.4X. The company has an estimated P/E for this calendar year of about 69X. I think a better way of looking at that kind of a metric is to look at the free cash flow yield. The company should generate about $600 million of free cash flow in calendar 2016. That is a free cash flow yield of 5.1%
Fortinet's shares are obviously cheaper. Its growth rate is about half that of PANW and its free cash flow margin is substantially less. The question for investors is whether the Palo Alto advantage in growth and profitability is worth the premium valuation. Fortinet has a EV/S of 3.2X. Its EV/billings are just 2.66X. Its P/E based on 2016 guidance is 41X. Its free cash flow yield based on 2016 estimates should be about 8%.
Needless to say, projections can be missed with a huge impact on the share price of highly valued names. There are all kinds of ways of accounting for risk, far too numerous to mention in this context. For what it is worth, in my opinion, because security is such a high priority in both the commercial and government sectors, these companies have a leg up over most other IT companies in achieving their projections. The opprobrium that attaches to enterprises that have suffered through security breaches and the extraordinary liabilities that they potentially face has made security spending as close to sacrosanct as anything can be. The situation in the government is even more weighted toward putting a priority on security spending.
I think that the valuation analysis has to try to take into account the rapid growth in both subscription revenues and the deferred revenue growth for both of these companies. At some point, and I have no idea when, as growth slows down subscription renewals will start to become an increasing component of the revenue mix. There will be a time in the future when reported revenue growth starts to equal or exceed bookings growth. At that point, operating margins for both of these companies will increase rapidly and cash flow margins can increase even beyond the levels already achieved at Palo Alto.
How long can superior growth continue? Most observers don't like to go out beyond five years for obvious reasons. But five years of say 30% growth in the case of Palo Alto will increase the size of the company by 5X. That still produces a business with just $7.5 billion in revenues with a TAM likely to be $30 billion or more at that time. Companies with that kind of growth coupled with rising margins have a strong investment case, I believe.
Fortinet seems likely to grow more slowly - perhaps 17% for the five-year period is reasonable. But that still produces a business that would be 3X the current size of that company. If it happened that way, and margins reached the company's 20% target, FTNT would be earning EPS of $2.70 and still would be achieving growth substantially greater than the IT space as a whole and it would be still be able to achieve higher margins as well.
The network security space is clearly the component of the cyber security market in which to invest. It has faster growth and offers two clear market share winners in Fortinet and Palo Alto. Both companies have had relatively stable senior management teams and the founders of both companies are still on board, although not in a CEO role in the case of Palo Alto.
Palo Alto has had a significant technology advantage of its integrated platform from its growth and most observers still suggest that its lead is intact. On the other hand, Fortinet also is offering a platform these days and it has met with success in selling to major enterprises indicating that it has at least a competitive product. The continuing market share donors are likely Check Point, Cisco and Juniper, with an emphasis on the latter.
Using historical metrics, the shares are not cheap. But they offer a combination of some of the fastest growth rates in the investment universe coupled with a huge amount of operating leverage that is likely to be seen down the road. Investing in growth stocks is not for the faint of heart. But given the high priority that users place on investments in network security, coupled with the value of the subscription base that is being built, outweighs the inevitable caution built around high valuations. I also think that the lack of visible cyclicality makes these names somewhat unique at this writing.
Choosing between the two names is inevitably a matter of personal preference. For myself, I will always pick the market share winner and hence will choose Palo Alto. But there will certainly be readers who prefer the lower valuation of Fortinet and there are those who love a bargain. I do think that both of the names offer superior risk/rewards to the market as a whole.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.