Buy Alert: March 7, 2013

| March 7, 2013

Buy Alert:  March 7, 2013


Trade Details

Buy F5 Networks (FFIV) April 2013 $105 Calls for $1.00 or better



FFIV is the leading provider of application delivery networking technology, with roughly 50% of the market.  Yet, the stock plunged 7% in one day in late February and is now trading under all its key moving averages.

Why is the stock down?

Because a research firm downgraded the stock to a “sell” rating based on increasing competition in the application delivery space.  You read that right.  The stock’s down because ONE, solitary research firm downgraded it.  And since when is it a surprise that a market leader has to deal with increasing competition.  Isn’t that called capitalism?

I don’t see any reason to doubt FFIV at this point.  I’ll start to worry about competition when it shows up in the company’s bottom line.  Until then, I believe the selling is overdone and a bounce back is imminent.

We’re going a little further out of the money on this trade because the options are a bit expensive.


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F5 Networks


Category: OTW Buy Alerts