Online security boosts VeriSign (VRSN)

"Among those core businesses, VeriSign is the leading provider of secure internet services for internet-based commercial transactions and communications.

"It has more than 100,000 customers processing over 30% of North American e-commerce transactions. The company recently reported it had hit a record of more than one billion global 'secure-certificate' validations in a day.

"The company also operates the authentication root for Radio Frequency Identification and Electronic Product Code networks for EPCglobal, which allow businesses to track and share product data in real-time.

"The company also routes more than 14 billion website accesses a day for internet users and also manages the Domain Name System for over 90 million website names and addresses.

"Further, VeriSign also operates the world's largest independently owned SS7 network, providing connectivity, switch, and transport functions needed for phone calls made on the Public Switched Telephone Network (PSTN), translating 5 million inter-carrier text messages daily, and handling 50% of the roaming traffic on phones in the U.S.

"In August, the company reported 9% year-over-year sales growth in its 2nd quarter, and 19% year-over-year earnings growth. With internet usage expected to grow for years to come and security of websites and transactions ever more important, VeriSign should be well positioned for the future.

"Wall Street's consensus estimate is for earnings of 90 cents a share for the full year (versus $.73 last year), and $1.10 for full year 2010. According to First Call/Thomson Financial of 23 analysts following the company, nine rate it a strong buy, nine rate it buy, four rate it hold, and only one rates it underperform.

"On the technical charts, the stock found support in last year's bear market plunge at the level at its 2006 low, leaving a potential long-term double-bottom in place.

"It has been volatile since its low of last November, but making higher lows on its pullbacks. It has now broken out above its 20-week moving average, its Relative Strength Index is rising from its oversold zone, and intermediate-term technical indicators are on renewed buy signals.

"The main risk is in the volatility associated with internet companies, especially in market pullbacks, and the difficulty in projecting their earnings. But short-term volatility notwithstanding, the long-term prospects are positive."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.