Aruba Networks (ARUN): Strong BYOD solutions

By Michael Cintolo, Editor of Cabot Top Ten Trader
From Cabot Wealth Advisory 3/26/13 Sign up for free Cabot Wealth Advisory e-newsletter

One leading stock I’m going to highlight today is Aruba Networks (ARUN), which I wrote about in Cabot Top Ten Trader a week ago Monday:

“These days, just about everyone you know probably owns a smartphone, tablet or both, and they use them all the time. Yet when these same people head to work, they usually have to use a company-issued laptop or smartphone to access the company’s network and any important data; it’s the company’s way of ensuring proper security and access rights (so employees only get access to stuff they’re supposed to). It makes sense, but it’s tremendously cumbersome and results in a ton of extra cost for the company. Enter Aruba Networks, which is focused on providing networking equipment that allows so-called BYOD (Bring Your Own Device), helping companies and other large entities (government agencies, college or other campuses, etc.) save money, simplify operations and, importantly, make life easier for employees. Aruba has competition from the usual suspects like Cisco, but management remains confident that their technology is best-in-class; in the latest conference call, the top brass said their win rate against Cisco may have actually increased of late, despite some new Cisco product introductions. Analysts see earnings growth in the 25% to 30% range for the next few quarters, and while Aruba doesn’t offer anything revolutionary, we think demand for its BYOD solutions should stay strong for a long time. We like it.”

The stock peaked in early 2011 and went through the wringer until the middle of last year, when it bounced for a while and then etched a four-month base.  The breakout came a few weeks ago after a great quarterly report, and since then, ARUN has traded in a tight range (24-26) despite the market’s ups and downs.  I think it’s buyable around here with a stop around 23, but if you want to wait for a powerful move above 26.25, that might lessen your odds of getting tossed around. Click here for more information.

Company Details

Aruba Networks (ARUN)
1344 Crossman Avenue
Sunnyvale, CA 94089-1113
Index Membership: N/A
Sector: Technology
Industry: Networking & Communication Devices
Full Time Employees: 1,407