Adobe Systems (ADBE)

Considers this as one of the horsemen of technology, an excellent company to buy. There is a dividend yield. They continue to readjust themselves in a Cloud-based format, rather than downloaded software. Has a recurring revenue structure. The company is excellent. Their editing programs and software have become the standard in the design world.

(Market Call Minute.) An interesting story. Not cheap, trading at 24X earnings. They have done a very good job of trying to understand how people use their products and marketing and sales.

An interesting discovery for him when he was looking for low volatility names. What attracted him was that they completely changed the way they distributed their business as a subscription model. This makes it much more affordable for smaller businesses and individuals, and also makes strides to eliminate the potential for pirated and illegal copies. Their most recent earnings were really surprisingly good, and the adoption rate was a very, very high.

This is just in the right spot. They are sort of old technology/new technology. Have put their creative suite up on line into the creative Cloud. That has tremendous growth for them. Last quarter had blockbuster numbers and blew away the street. There is a ton more growth coming. Management estimates there is at least 8+ million of their installed base that has yet to migrate to the Cloud, and that becomes a recurring revenue model as well. Huge uptick in revenues and huge uptick in earnings with very strong margins.

Like most technology stocks, this has a period of seasonal strength from October right through until usually the end of January. Looking at the technicals, the stock has continued to do very well. Chart shows it is still in an upward trend and recently hit an all-time high. Technically it looks very good. It is outperforming the market, trend is still on the upside and it is still above its 20 day moving average. His bias would be to use seasonality for this particular stock, i.e., buy it around the middle of October.

Chart tells him that it is going higher. It shows a breakout. A wave count shows the 1^st correction starting in mid-2011, levelling off through 2012 with a strong advance starting in late 2012. It is $10 above the 200 day moving average. If you ease yourself into it has more room to go.