Kim BoltonFortinet IncFTNTBUYAug 14, 2023

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.

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.

12-month price target of $73.50, so it's getting close. You might want to take a bit of profit off. That way, you're still in it, and if it goes down, you can buy it back. Recently beat on top and bottom lines, plus raised guidance.

It provides network and cloud security with broad integrated automated cyber security solutions, both hardware and software. Its market cap is $50 billion.

In his momentum portfolio. Growing sales and its order book at a 30% pace, which is a leading indicator of future demand. Growing earnings even faster. Pricey at 40x earnings, but justified given the great secular growth ahead. Trading below its historic average. Sees good and accelerating growth ahead, because of the imperative of cybersecurity. No dividend.