Fortinet Inc (FTNT-Q)

Trades at 30x forward PE and 33% free cash flow margins. Super fundamentals, and yet shares are ignored. This outage could help Fortinet shares.

Hold for now, but he wouldn't hold it going into earnings, estimated to be August 2. Management is tremendous, but very conservative, and they lowball numbers and then stock rolls over.

If you ever get a chance to buy CRWD, that's a good one in the space.

He used to own CHKP. Both PANW and FTNT are strong businesses, market leaders in the space and taking market share away from CHKP.

Challenge is that PANW and FTNT are really strong in this industry. Good for the consumer, but may not be good for the businesses in that space. At 46x PE, PANW is really expensive, growth needed to justify that valuation is substantial, high valuation keeps him on the sidelines.

Look at the space as a whole to see if you want to be involved, rather than choosing just one player. Does like the aspect of customer "stickiness" in that once a customer signs up, switching costs are high.

Very conservative during reporting season. They lowball it, and stock rolls over. A trading vehicle. Much prefers CRWD and SentinelOne.

An analyst recommend Palo Alto, Fortinet and Crowdstrike, citing tailwinds that continue to be increasing cyber-threats, SEC requiring companies to disclose hacks, and easier growth comps. Nothing new. He likes this space.

Saw growth slowing, sold. Market share shifting in such a dynamic area makes it hard to identify the winners. Instead, bought WCBR, a more diversified cybersecurity ETF. 

The stock is plunging 16% after reporting. The fall is idiosynchratic, otherwise peers like Crowdstrike would be down as much, too. Fortinet faces major challenges in their firewall products. Owns it, but not every stock in your portfolio will be perfect. Is holding this at a loss. Many analysts have cut back price targets to $50-52.

Cyberattacks are not going away. Global leader, second only to PANW. Long-term, seeing robust secular trends of escalating threats, digital expansion, and increased budgets allocated to cybersecurity. Work from home and internet of things will also drive demand. EPS growth rate about 18-20%. No dividend.

Has done well with this for the past few years. The big competitor to Palo Alto. It benefitted from the pandemic during remote work. Also, there's a secular market in cybersecurity. He sold it a few weeks ago after they reported Q2. Things changed abruptly; corporates are prioritizing away from cybersecurity and spending instead on AI. This spending is probably deferred, not cancelled.

They just reported top and bottom line beats. Managers have always been cautious--they lowered guidance (and shares got crushed), so now is a great buying opportunity. He targets $78.30

Good company despite recent quarterly results.
Long term - expecting strong performance.
Good cyber security assets. 
Would hold if already own shares.
Sees potential for growth in free cash flow and earnings. 

Cybersecurity is a good business now with strong secular growth and rising demand. FTNT is among the market leaders. He's owned this for some years. Valuation is a little high vs. their growth, but he's getting good value. They keep beating earnings.

US tech company leading cyber security.
Very strong demand for cyber security.
Excellent business that would recommend.
Growing very fast the past 5 years.
Expecting 20% growth. 
Current share price a good place to buy at.
Owns shares in the company. 

He bought this in early March at $126 and sold it today at $147. It's the least profitable cybersecurity stock and he's a little troubled by the rising move in interest rates, not peaking as he expected. So stocks like Crowdstrike will be challenged. This is a valuation trade, and he will buy Palo Alto and/or Fortinet at a lower price (they have lower valuations). Ring the register and take profits. Fortinet generates strong free cash flow, and also scores well in ROE and debt-to-equity. Maybe not a super balance sheet, but they have the flexibility to do the things they want, because they have profits today. So, they're less reliant on funding from the debt markets and less effected by rising rates.

Has a better balance sheet than peers and are gaining market share in the enterprise side. Boasts 30% total revenue growth.