Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

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A10 Networks (ATEN) is benefiting from service providers and enterprises putting cybersecurity as a priority and in doing so has diversified its customer base. Network breaches have become a headline grabbing event this year, which leads to customers making prevention an urgency.</li></ul> <ul type="disc"><li>ATEN reported third quarter revenue of $65.4 million compared to $56.6 million in the year ago period. The revenue performance exceeded our estimate of $63.1 million as we had been expecting revenue growth to remain subdued since ATEN is undergoing a transition to subscription revenue model.</li></ul> <ul type="disc"><li>ATEN was laying the groundwork for the current performance four quarters ago when the Company changed its sales and marketing strategy.</li></ul> <ul type="disc"><li>ATEN revamped its product offering two years ago with a focus to tailor the business more towards software. The subscription model has resulted in ATEN’s long-term deferred revenue rising to $46.6 million compared to $40.1 million in the year ago period.</li></ul> <ul type="disc"><li>Our price target is now $20 from $17.</li></ul>


A10 Networks (ATEN) is benefiting from service providers and enterprises putting cybersecurity as a priority and in doing so has diversified its customer base. Network breaches have become a headline grabbing event this year, which leads to customers making prevention an urgency. ATEN reported third quarter revenue of $65.4 million compared to $56.6 million in the year ago period. The revenue performance exceeded our estimate of $63.1 million as we had been expecting revenue growth to remain subdued since ATEN is undergoing a transition to subscription revenue model. ATEN was laying the groundwork for the current performance four quarters ago when the Company changed its sales and marketing strategy. ATEN revamped its product offering two years ago with a focus to tailor the business more towards software. The subscription model has resulted in ATEN’s long-term deferred revenue rising to $46.6 million compared to $40.1 million in the year ago period. Our price target is now $20 from $17.

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A10 Networks (ATEN) is benefiting from increased attention on network security. An increase in data traffic only intensifies the need for security, which is where ATEN is likely to win more customers. ATEN reported second quarter revenue growing by 12.7 percent from the year ago period even though a bigger portion of revenue is recurring.</li></ul> <ul type="disc"><li>ATEN generated $59.2 million in revenue in the second quarter, up from $52.5 million in the year ago period. We had been expecting revenue of $58.2 million.</li></ul> <ul type="disc"><li>The Company introduced cloud solutions and has been ramping sales of these solutions this year. Software remains a minority portion of revenue. The Company has been maintaining subdued revenue growth expectations this year as a result of the transition away from hardware.</li></ul> <ul type="disc"><li>Leverage in the operating model coupled with growth in revenue for the remainder of the year is poised to point ATEN on a trajectory to post non-GAAP EPS of $0.70 in 2022.</li></ul> <ul type="disc"><li>Our price target is now $17 from $13.50.</li></ul>


A10 Networks (ATEN) is benefiting from increased attention on network security. An increase in data traffic only intensifies the need for security, which is where ATEN is likely to win more customers. ATEN reported second quarter revenue growing by 12.7 percent from the year ago period even though a bigger portion of revenue is recurring. ATEN generated $59.2 million in revenue in the second quarter, up from $52.5 million in the year ago period. We had been expecting revenue of $58.2 million. The Company introduced cloud solutions and has been ramping sales of these solutions this year. Software remains a minority portion of revenue. The Company has been maintaining subdued revenue growth expectations this year as a result of the transition away from hardware. Leverage in the operating model coupled with growth in revenue for the remainder of the year is poised to point ATEN on a trajectory to post non-GAAP EPS of $0.70 in 2022. Our price target is now $17 from $13.50.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology.  In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology - our favorite.

The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology.  In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology - our favorite.

U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector

Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector.

Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector. 

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection, rotations still seem to be the norm.  We have suggested that the current sector rotations are reminiscent of 1994. If conditions in the current market are indeed mimicking those of 1994, we would expect that sectors that are oversold are likely to bounce, and sectors that are overbought are likely to suffer pullbacks, which makes technical tools such as relative strength less viable.In our July Strategy we outline this thesis and highlight opportunities within the Technology, Health Care, Financial and Energy Sectors.

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection, rotations still seem to be the norm.  We have suggested that the current sector rotations are reminiscent of 1994. If conditions in the current market are indeed mimicking those of 1994, we would expect that sectors that are oversold are likely to bounce, and sectors that are overbought are likely to suffer pullbacks, which makes technical tools such as relative strength less viable.In our July Strategy we outline this thesis and highlight opportunities within the Technology, Health Care, Financial and Energy Sectors.

United States

A10 Networks Inc. provides computer networking products and security solutions. The Company offers application networking platforms and security products to streamline technology operations, including cloud and service providers and application delivery solutions. A10 serves customers in various industries worldwide.

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A10 Networks (ATEN US)

ATEN: Momentum in Revenue, PT to $20

Our price target is now $20 from $17 to reflect higher revenue growth rate ATEN is projecting for Q4 and into 2022. The higher growth rate comes as...

BWS Financial Inc

ATEN: Momentum in Growth, PT to $17

Strong free cash flow generation from a stock that is valued as a hardware story even though it is clearly software with deferred revenue growing...

BWS Financial Inc

U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector

The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time...

Vermilion Research

Opportunities in U.S. Technology Sector

Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of...

Vermilion Research

U.S. Equity Strategy:

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection,...

Vermilion Research

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