Here’s a drill-down on two Internet technology (IT) stocks in David Tepper’s portfolio that are doing well and seem to have the technology “it factor.” NetApp Inc. (NTAP, Financial) is a data storage provider that customizes solutions for a wide variety of applications, such as enabling original equipment manufacturers to offer IT and storage solutions that serve specific customer requirements. Check Point Software Technologies Ltd. (CHKP, Financial) from Israel is on a global mission to make the Internet secure, also via IT security.
Awaiting the third quarter update, Tepper’s portfolio lists 72 stocks, with a total value of $6.9 billion, and a quarter over quarter turnover of 37%. The hedge fund portfolio is weighted with top three sectors: ETF, options, preferred at 27.9%, financial services at 17% and industrials at 15.6%, as of the second quarter of 2013.
Here’s a company update on both stocks considered undervalued, based on calculations using the discounted cash flow model, as applied to predictable companies only.
NetApp Inc. (NTAP)
Predictability: 4 out of 5 Stars
Up 45% over 12 months, NetApp Inc. has a market cap of $13.24 billion; its shares were traded at around $38.93 with a P/E ratio of 27.20. The dividend yield is 0.80%.
Incorporated in 1992, NetApp Inc. provides data storage systems and data management solutions that form the foundation for efficient and flexible IT infrastructures. The company’s storage systems help customers streamline operations and lower the cost associated with storing and managing data.
The company reported financial results for the first quarter of fiscal year 2014 ended July 26, 2013, with revenue of $1.5 billion, up 5% from the same fiscal quarter a year ago. The company had quarterly net income of $82 million (GAAP), compared to $64 million in the same quarter a year ago. Earnings per share were reported at $0.23 for the fiscal quarter, up from $0.17 per share, for the same quarter a year ago. The company balance sheet shows $5.084 billion of cash, cash equivalents and investments, at the end of the first fiscal quarter of 2014.
In a company press release, president and CEO of NetApp Inc., Tom Georgens, commented on his company’s performance: "NetApp delivered solid results and innovation with the latest release to our clustered Data ONTAP® operating system despite an uneven macro environment, our branded business was strong, with 9% year-over-year growth. This is evidence of the tremendous value we are delivering to customers today and their confidence in our long-term strategy to enable them to navigate the future."
Regarding guidance for the second quarter of fiscal year 2014, the company expects total revenue in the range of $1.560 billion to $1.660 billion, with EPS in the range of $0.41 to $0.46 per share (GAAP).
Guru Action: As of June 30, 2013, David Tepper reduced his position by 10.45%, selling 74,732 shares at an average price of $36.24, for a gain of 7.4%.
Buying 900,399 shares at an average price of $35.47, Tepper gained 10% over his five-quarter trading history. Selling 260,332 shares at an average price of $32.34, he made a gain of 20%.
His 640,067 shares are valued at $24.18 million and make up 0.35% of his portfolio, as of the second quarter of 2013.
Track historical pricing, revenue and net income:
Check Point Software Technologies Ltd. (CHKP)
Predictability: 4 out of 5 Stars
Up 32% over 12 months, Check Point Software Technologies Ltd.has a market cap of $11.52 billion; its shares were traded at around $58.63 with a P/E ratio of 19.30. The company does not pay a dividend.
Founded in 1993, Check Point Software Technologies Ltd. is a global Internet security company. Check Point customizes solutions to meet the security needs of any organization. The company develops and markets software and hardware products and services for information technology security. The company provides technical customer support programs and plans, certification and educational training on company products, and professional services.
The company reported third quarter 2013 financial results, with revenue up 4% year-over-year at $344.1 million, compared to $332.4 million in the same quarter last year. The company had a net income of $159.7 million (GAPP) in the third quarter of 2013, marking a 5% jump over last year’s net income of $152.4 million. Earnings per diluted share also rose by 10% in the third quarter of 2013 at $0.80, compared to $0.73 in the same quarter of last year.
Check Point’s founder, chairman and CEO Gil Shwed commented on his company’s performance in a company press release: “We are very pleased with our healthy third quarter results. Revenue and earnings per share for the quarter were toward the high-end of our projections, underscoring the strength of our business. The recently launched data center and small appliance families were received enthusiastically by our customers and posted another quarter of high growth.”
Guru Action: As of June 30, 2013, David Tepper reduced his position by 10.48%, selling 64,964 shares at an average price of $48.11, for a gain of 21.9%. In only two quarters of holding, Tepper bought a total of 619,911 shares at an average price of $49.92, and gained 17%.
His 554,947 shares are valued at $27.5 million and comprise 0.4% of his portfolio, as of the second quarter of 2013.
Track historical pricing, revenue and net income:
Appaloosa Management LP is led by highest-earning Guru David Tepper whose average 12-month return is currently 19.98%. His average 10-year return is 30.5% and 29.2% since inception in 1993.
GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.
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Awaiting the third quarter update, Tepper’s portfolio lists 72 stocks, with a total value of $6.9 billion, and a quarter over quarter turnover of 37%. The hedge fund portfolio is weighted with top three sectors: ETF, options, preferred at 27.9%, financial services at 17% and industrials at 15.6%, as of the second quarter of 2013.
Here’s a company update on both stocks considered undervalued, based on calculations using the discounted cash flow model, as applied to predictable companies only.
NetApp Inc. (NTAP)
Predictability: 4 out of 5 Stars
Up 45% over 12 months, NetApp Inc. has a market cap of $13.24 billion; its shares were traded at around $38.93 with a P/E ratio of 27.20. The dividend yield is 0.80%.
Incorporated in 1992, NetApp Inc. provides data storage systems and data management solutions that form the foundation for efficient and flexible IT infrastructures. The company’s storage systems help customers streamline operations and lower the cost associated with storing and managing data.
The company reported financial results for the first quarter of fiscal year 2014 ended July 26, 2013, with revenue of $1.5 billion, up 5% from the same fiscal quarter a year ago. The company had quarterly net income of $82 million (GAAP), compared to $64 million in the same quarter a year ago. Earnings per share were reported at $0.23 for the fiscal quarter, up from $0.17 per share, for the same quarter a year ago. The company balance sheet shows $5.084 billion of cash, cash equivalents and investments, at the end of the first fiscal quarter of 2014.
In a company press release, president and CEO of NetApp Inc., Tom Georgens, commented on his company’s performance: "NetApp delivered solid results and innovation with the latest release to our clustered Data ONTAP® operating system despite an uneven macro environment, our branded business was strong, with 9% year-over-year growth. This is evidence of the tremendous value we are delivering to customers today and their confidence in our long-term strategy to enable them to navigate the future."
Regarding guidance for the second quarter of fiscal year 2014, the company expects total revenue in the range of $1.560 billion to $1.660 billion, with EPS in the range of $0.41 to $0.46 per share (GAAP).
Guru Action: As of June 30, 2013, David Tepper reduced his position by 10.45%, selling 74,732 shares at an average price of $36.24, for a gain of 7.4%.
Buying 900,399 shares at an average price of $35.47, Tepper gained 10% over his five-quarter trading history. Selling 260,332 shares at an average price of $32.34, he made a gain of 20%.
His 640,067 shares are valued at $24.18 million and make up 0.35% of his portfolio, as of the second quarter of 2013.
Track historical pricing, revenue and net income:
Check Point Software Technologies Ltd. (CHKP)
Predictability: 4 out of 5 Stars
Up 32% over 12 months, Check Point Software Technologies Ltd.has a market cap of $11.52 billion; its shares were traded at around $58.63 with a P/E ratio of 19.30. The company does not pay a dividend.
Founded in 1993, Check Point Software Technologies Ltd. is a global Internet security company. Check Point customizes solutions to meet the security needs of any organization. The company develops and markets software and hardware products and services for information technology security. The company provides technical customer support programs and plans, certification and educational training on company products, and professional services.
The company reported third quarter 2013 financial results, with revenue up 4% year-over-year at $344.1 million, compared to $332.4 million in the same quarter last year. The company had a net income of $159.7 million (GAPP) in the third quarter of 2013, marking a 5% jump over last year’s net income of $152.4 million. Earnings per diluted share also rose by 10% in the third quarter of 2013 at $0.80, compared to $0.73 in the same quarter of last year.
Check Point’s founder, chairman and CEO Gil Shwed commented on his company’s performance in a company press release: “We are very pleased with our healthy third quarter results. Revenue and earnings per share for the quarter were toward the high-end of our projections, underscoring the strength of our business. The recently launched data center and small appliance families were received enthusiastically by our customers and posted another quarter of high growth.”
Guru Action: As of June 30, 2013, David Tepper reduced his position by 10.48%, selling 64,964 shares at an average price of $48.11, for a gain of 21.9%. In only two quarters of holding, Tepper bought a total of 619,911 shares at an average price of $49.92, and gained 17%.
His 554,947 shares are valued at $27.5 million and comprise 0.4% of his portfolio, as of the second quarter of 2013.
Track historical pricing, revenue and net income:
Appaloosa Management LP is led by highest-earning Guru David Tepper whose average 12-month return is currently 19.98%. His average 10-year return is 30.5% and 29.2% since inception in 1993.
GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.
If you are not a Premium Member, we invite you for a 7-day Free Trial.
