Sandvine Corp. (SVC-T)

(Top Pick Jun 29/16, Up 53.61%) They are being taken out. He thinks it is worth substantially more, however. It is extremely profitable with high margins. He thinks a higher bid will come in.

A week or so ago, they missed revenue and earnings expectations. If he had $10 for every time they’ve done that in the last couple of years, he would have $100. They can’t hit a forecast to save their life. Have lots of cash, because they raised money at a higher level, and they still have the cash. Not a bad product and not a bad management team, but he would like management to take themselves private. They are never going to get a growth multiple if they can’t ever hit their numbers.

(A Top Pick Jan 6/16. Down 15.85%.) One of the more frustrating names in technology that he has looked at. Has always liked what they do and the valuation always seems reasonable. Generates a lot of cash. Has really scaled back his position in this. At the current price, you are building in pretty much all the downside, and not giving them any opportunity for upside. Security is a big thing they are getting into. Thinks there are better days ahead for them.

This provides software for deep packet inspection, allowing Cable Cos and Internet providers to either throttle back on certain types of packets and information, and to dial it up for others. They’ve had a bit of a rough year because of missed quarters. However, they have something like $1.40 a share in cash. The 4^th quarter is typically their strongest, so he is considering purchasing this. Telcos spending seems to be seasonal and tends to peak in the 4^th quarter. He sees a potential trade opportunity on the Long side.

Technology play. They have been quite disappointing in terms of the last couple of quarters. They have a very good balance sheet, so half the market cap is in cash. It trades in a range. Fundamentally they have not been able to hit their targets. It is a very lumpy business. You might be able to make a trade in this one.

One of his top tech holdings. He buys on weakness. They announced lower than expected revenues for Q4, but there were challenges in terms of some of the companies they service. The stock is cheap. They are sitting on $1.00-$1.50 of $2.75 a share in cash. They started a dividend. There is low downside from here whenever sales growth continues next year. Gross margins are in the 80% range. It is a bit lumpy from one quarter to the next.

Has a piece of hardware and software combination that looks at quality of service so Internet companies can know what kind of traffic is coming over their network. Year-over-year earnings were down 17% as of early October. Earnings are forecast to grow from $.16 in 2016 to $.19, about 17% upside against a 15 PE. 2.4% dividend yield. The outlook for earnings is reasonable.

This has ROE at about 19%, just below where he would like it. Looking at a longer-term chart, the stock has been rather directionless for the last little while. He likes to see companies that are fundamentally and technically strong. If he were looking to add this to his portfolio, he would like to see some strength. If it can get up above $4.60 there is some good buying support.

They missed on a number of quarters so he sold it recently. He feels the overall business is very lumpy. You can buy it at $2.60 if you are a longer term investor.

He likes it. They are sitting on a lot of cash and trading at a low multiple. He recently bought some. It is somewhat seasonal. A lower than expected quarter is a great time to buy it. It is a very valuable service to the telcos across the world. It is worth more than it is trading at right now.

(Market Call Minute.) They seem to perpetually miss and then beat. Good valuation, good price momentum and a great balance sheet.

(Market Call Minute.) If you own, he would probably take a little money off the table. It has had a nice bump after the quarter.

He really likes it. They do deep packet inspection so Internet companies can know what kind of traffic is coming over their network so they know how much they should be charging. SVC has had very lumpy earnings. He is watching it.

He’s been cautious on this. Deep pack inspections is becoming largely obsolete.

(Market Call Minute) It tends to be lumpy so you should trade it.