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Selling F5 Networks Inc.

Apr. 01, 2022 5:31 PM ETF5, Inc. (FFIV)3 Comments
Patrick Doyle profile picture
Patrick Doyle
6.87K Followers

Summary

  • The company has grown revenue nicely, and recent acquisitions will probably goose that further. The problem for me is that expenses are rising even faster.
  • The shares aren't cheap in my view. They're about 56% more expensive than when I bought. The last time they hit this valuation, they underperformed.
  • Unfortunately, it's not possible to sell put options, as the premia for reasonable strikes is too thin in my view. The juice isn't worth the squeeze.
Digital background security systems and data protection

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It’s been a little over 41 months since I wrote my bullish article about F5 Networks Inc. (NASDAQ:FFIV), and in that time, the shares have returned about 25% against a gain of ~64% for the S&P 500. I thought I’d check on the

This article was written by

Patrick Doyle profile picture
6.87K Followers
I'm a quant investment newsletter writer who marries fundamental analysis with the latest research in momentum. Over the past few years, I’ve developed a piece of software that helps me track the level of optimism and pessimism embedded in stock price. I seek to challenge the assumptions embedded in price by profitably exploiting the disconnect between what the market thinks and what is a likely outcome. I invest in those companies that have a greater than average chance of giving us all a surprise in the next few months.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of FFIV either through stock ownership, options, or other derivatives. 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.

Although I'm long at the time of submission, I'm about to sell.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (3)

S
do you have any thoughts on ATEN? seems to be a smaller competitor that is growing earnings
k
Ah. Autocorrect. Could sell calls instead.
k
Oils sell calls instead ??
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