“Sourcefire, Inc. (FIRE 36.19 Nasdaq) is a network defense company. Many are predicting strong growth in this sector as more and more companies seek to safeguard the data stored in their computers. Sourcefire has a nice top-line growth trend that amounts to a 30.5% compound annual growth rate. (And thus the smokin’ P/E.) The market for its services is large: According to Gartner, enterprise security was a $22.5 billion market in 2011.
“The intrusion prevention market was approximately $1.5 billion in 2010 and is projected to grow to $2.1 billion in 2014, representing a compound annual growth rate of approximately 9%. Assuming that number is accurate, Sourcefire has what looks like an 8% market share. So the nice thing about Sourcefire is that it can continue to grow indefinitely. One reason to be confident in that is the company’s history. It was founded by Martin Roesch, a bona fide computer genius who wrote the protocol for intrusion detection. (It’s called Snort.) It’s open source, with nearly four million downloads to date, and Roesch built a commercial version of the software in response to industry demand. So Sourcefire is kind of like Microsoft: Gates built his operating system and software on MS-DOS and thus conquered the world. Sourcefire could well conquer its corner of it, too. It is clearly a leader. There’s nothing not to like about its financials. Its industry position is strong, too. I like this company for a multiyear holding period.”
Andy Obermueller, Fast-Track Millionaire, February 11, 2012
