Technology stock expert Mark Mowrey finds the server virtualization market of recent IPO VMware (NASDAQ: VMW) attractive, but as a strict value and growth manager he is not interested in the highly-valued shares.

"So how about a company that sells VMware's software?" he asks in his industry-leading The Prudent Speculator TechValue Report. Here, he looks at Wayside Technology (NASDAQ: WSTG), which does meet his value criteria and is poised to benefit from VMware's growth.

The advisor recalls, "As we watched shares in VMware soar after they made their IPO, we wondered how we might take advantage of the tremendous growth in server virtualization solutions." He explains, "These servers allow tech managers to more efficiently use the massive computing power of modern servers by running multiple virtual computers on one system, potentially reducing overall hardware needs."

Wayside Technology, he notes, has grown in part because of VMware's top-line surge, and, he adds, should continue to do so as an important distributor of the latter's software. Indeed,the stock earns the advisors 'Cash is King' designation for its financial strength. He notes, "WSTG shares also sport an attractive dividend yield."

Wayside, which he notes was formerly known as Programmer's Paradise, is a technology services company targeting software developers and IT professionals. In 2006, he points out, more than half of the software Wayside purchased for resale carried the VMware label.

Normally, he says, such dependence is a concern for investors, and it is in this case, too. But, he continues, considering VMware's growth prospects -- the Street expects revenue to approach $1.3 billion this year, up from just over $700 million in 2006 -- that dependence, he contends, has a positive effect.

Mowrey explains, "Investor confidence was shaken a bit at the end of Q2 as top-line expansion failed to keep pace with prior quarters. Management, who sound like an impressive bunch, said that it chose to avoid meeting demand that it found insufficiently profitable."

The advisor suggests, "Management is focusing on continued gains in gross margins, including increased management control over pricing, a focus on high margin products and markets and an expanded benefit from services."

Acquisitions are expected, too, he states, taking advantage of WSTG's cash-flush balance sheet, which he notes now includes $4.34 per share in cash and near cash and no long-term debt. In that sense, says Mowrey, "We're happy to see that management is clear that they want to make not just any acquisition, but the right acquisition.

He concludes, "The shares currently trade at under 17 times trailing earnings, attractive considering the balance sheet and the stock's current 4.3% dividend yield. While reporting second quarter results, management actually boosted the already generous dividend by a penny, to $0.15 per quarter."

Each day, Steven Halpern's TheStockAdvisors.com features the latest stock picks and investment ideas from the nation's leading financial newsletter advisors.