Mark Holder manages Covestor's Opportunistic Arbitrage Long Only portfolio, which focuses on small- and mid-cap companies that appear fundamentally strong and operating in industries with attractive macroeconomic trends. Mark recently added a new position in Radware Ltd. (RDWR) to this portfolio and we took the opportunity to ask Mark about his investment thesis. His response:
Radware is a play on cloud computing and the need for fast and secure networks. The stock is attractive because it sells at a forward earnings multiple of 22x (as of 2/1/11) with a 5 year growth rate of 35%, making the stock a relative value in the sector. One of the prime reasons for adding it the Opportunistic models was to add more tech exposure after selling Terremark Worldwide (TMRK) due to the Verizon (VZ) merger.
Radware chart from Google Finance:
Here’s recent performance of the Covestor Opportunistic Arbitrage Long Only Model:
"RDWR Analyst Estimates" Yahoo Finance, 3/2/11. http://finance.yahoo.com/q/ae?s=RDWR+Analyst+Estimates