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Allot Communications Ltd. (ALLT)
When you
think about the internet, networks, bandwidth and mobile, Allot is one
of the
companies that probably not what comes to mind first, but their
products and
services play an integral part in how we are using all of them.
You also may
have a distain for companies like ALLT because they are the folks who
have the
technology track, meter and somewhat enforce bandwidth
consumption.
As consumers are surfing the web on their
mobile devices, Allots’ solutions monitor, route and record details for
providers like AT&T, Verizon and others to manage traffic per
application,
per subscriber, per cell, per service plan, and according to local
network
conditions.
As VOIP,
streaming video and IM traffic grow, so does potential business for
Allot. “Deep packet inspection technology” or Allots’
“Dynamic Actionable Recognition Technology” (DART) allows carriers to
pinpoint
what programs and services being used by consumers are sucking up
bandwidth. Carriers in turn, can optimize
networks and charge you for what you use.
They say it’s better for all, but at the end of the day, consumers’
usage is being capped and carriers are making more money, I wouldn’t
say that’s
balanced.
The days of
wireless, unlimited bandwidth usage are going away (for the time being
at
least) and just about every American carrier has now moved to pay per
usage
platforms as opposed to flat fee for unlimited usage.
Financials
& Recent Developments
Allot is a
small-cap (663 million mar-cap) based in Israel. Because the company is
still
small, its analyst coverage is limited to only 2. In its most
recent report, the company
reported 12 cents per share in earnings compared to the Zacks Consensus
estimate
of 10 cents.
The Israeli
internet company saw year over year sales growth of almost 36% on $77.8
million
in total 2011 sales and a Quarterly sales increase of roughly
10%.
They are currently trading at 45 times
forward earnings.
Moving
Forward
Earnings have
finally moved into positive territory for ALLT. Expectations are for
the company
to earn 10 cents when they report quarterly earnings on May 8th
(est). Analyst targets have been steady over the past month or
so.
Zacks Analysts also rate the stock as a
strong buy.
For those who
are open to more speculative investments, ALLT may be a company to
watch.
Currently
trading around $22.75 per share, ALLT has outpaced the S&P 500
by 37.5%
over the past year and outperformed the broad market by over 20% in the
past
month alone.
Volume is on
the light side, but the stock remains firmly above its 50 and 200 day
moving averages
of $18.23 and $15.46 respectively.
This
Week’s Momentum Zacks Rank Buy Stocks:
Harley-Davidson,
Inc. (HOG)
Harley
created a lifestyle and in my mind, they were the original social
network. Harley owners and other bikers shared a common
thread that
transcended culture, social status, gender and
ethnicity. Over the
past two decades, Harley has expanded its appeal beyond the middle
class biker
circles that made it famous. Yuppies and younger, hipper,
trendier buyers
have stepped up and put a Harley in their garage. If you look
at the
prices of their bikes and accessories, it’s a wonder that the middle
class
could ever afford one. Many of their showrooms rival some of
the most
expensive automotive brands in the world in their layout, décor and
technology.
But even with
a favorable cultural shift, the past couple years have been a bit rough
for the
company. Just recently they made cuts to their hourly
workforce and
shutdown one of their plants in Wauwatosa WI. Earlier this
month, after
50 years as head of styling, Willie G. Davidson, who is also the
grandson of
founder of William A Davidson, stepped down.
For a diehard
Harley fan and owner like me, one has to wonder what the effect will be
on the
Harley lineup with Willie G. gone. I think that they will not
only
continue to produce quality and consistency in their machines, but
perhaps now
will begin to explore some unique designs that are still true Harleys
at heart.
Fads come and
go, but Harley remains tried and true to its roots in many
ways. You may
have a chopper, bobber or custom bike, but for most of us who ride,
especially
long distances; there is nothing like a Harley. I believe their
international
story is one to watch as is the fact that the “chopper” fads are
fading,
steering more customers to Harley’s new, aggressive designs.
Cost Plus
(CPWM)
Cost Plus (aka World Market) operates 258 stores nationwide that offer
an
eclectic mix of everything from exotic (but economical) furnishings to
cookware
and foods from around the world.
Last time CPWM hit the Zacks Rank #1
buy list on January 24, 2011 it was
a $12 dollar stock; fast forward less than two months and the
shares are
up 50%, now trading close to $18 after hitting a 5 year high of $18.66.
In January my focus was on World
Market’s unique positioning, growth
prospects and expansion. I also saw analysts moving their estimates
higher
ahead of the earnings report which can be one of the best indicators if
a stock
is going to maintain momentum.
All of these factors combined made
CPWM a solid Zacks Rank Buy
candidate. The retailer delivered those anticipated bullish
results on
March 22nd, beating Zacks Consensus Estimates and sending shares
higher.
The question now is whether this momentum can continue?
Anheuser-Busch
InBev (BUD)
After pounding a couple pints of your favorite beer, the stresses of
modern day society may seem just a little bit less severe.
Based on
Anheuser-Busch InBev’s most recent earnings report and outlook, it
seems that
the world might be doing just that. It’s also the choice of much of the
middle
class and beer is, after all, the original social network.
(That’s what
Anheuser-Busch InBev claims anyway).
According to the Beer Institute, (yes
there is such a thing) sales of the
hoppy beverage rose more than 2% globally in 2011. Total
sales for the
year came in at $98 billion here in the US.
Americans are the
global kings of beer consumption compared to wine and hard
liquor.
Nielsen research noted that the rise
in sales revenue is coming largely
in part by the high-end beer business. The sale of imports, crafts and
above-premium beers sold “off-premises” was up nearly 3 percent.
It may be a good thing that “The King
of Beers” joined forces with Inbev
in 2008 because much of the growth is coming from “local” and “craft”
specialty
beers. Some of the major US brands (like Bud Light, Coors and
Miller) are
actually losing market share as consumers’ tastes change.
Budweiser
however has been gained some international love and so have shares of
BUD.
Cabela’s,
Inc. (CAB)
is on a
roll. New store openings and a strong brand are pushing shares of this
Zacks #1
Rank (Strong Buy) into new territory.
Cabela’s is a specialty retailer of
hunting, fishing, camping and outdoor
merchandise. You may know it from its big log cabin stores. It operates
33
stores in the United States and 2 in Canada. The company also has a
large mail
order and Internet business.
Cabela’s also issues Cabela’s CLUB
Visa credit card, which is its primary
customer loyalty program. It is operated through a wholly-owned
subsidiary,
World’s Foremost Bank.
Jared
A Levy is the Momentum Stock
Strategist for Zacks.com. He is also the Editor in charge of the
market-beating
Zacks
Whisper Trader Service.
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