In May and June, I wrote a series on what I think could be the top 25 stocks for the NEXT 25 years. It was a fun exercise and a lot of work. Since the series finished in mid-June, we've been knocked down from 25 stocks to 22 stocks: Opsware (NASDAQ: OPSW), Kyphon (NASDAQ: KYPH) and Color Kinetics (NASDAQ: CLRK) are all being acquired for significant premiums by obviously much larger companies.

We have another on our list that, although it's not being acquired, the stock has doubled in value these past 2 1/2 months. Blue Coat Systems (NASDAQ: BCSI) was written up on June 8. The stock was trading at $44, but it's now at $84.80. Blue Coat reported an absolutely explosive July quarter. Revenues came in at $62.4 million versus Street consensus of $58 million, representing a 71% year-over-year increase and a 15% up-sequentially from the April quarter.

The wide-area-network (WAN) optimization product set is gaining mainstream momentum. The even better news for Blue Coat Systems is that it is about to embark on an excellent new product cycle. The company saw bookings, pipeline and deferred revenues all go up substantially this past quarter and provide tremendous visibility going forward.

Continue reading Top 25 Stocks for the NEXT 25 Years: Blue Coat Systems (BCSI) -- update

Top 25 Stocks for the NEXT 25 Years: Blue Coat Systems (BCSI) -- update originally appeared on BloggingStocks on Tue, 28 Aug 2007 11:20:00 EST. Please see our terms for use of feeds.

In my book about Baby Boomer investing I highlight what I feel are the five major growth industries going forward. The industries are health care, alternative energy, technology, communications and lifestyle. I also mention 42 companies within those industries that could be the leaders, the game changers. Since the book has been published, five of the 42 stocks I wrote about are being acquired!

The latest one to go is Checkfree (NASDAQ: CKFR). Fiserve (NASDAQ: FISV) has announced its $4.4 billion bid. Checkfree made our banking-transactional life much easier. The other four that will be part of larger companies are Opsware (NASDAQ: OPSW), Color Kinetics (NASDAQ: CLRK), aQuantive (NASDAQ: AQNT) and Kyphon (NASDAQ: KYPH). Other than aQuantive, the other three were also part of my Top 25 stocks for the NEXT 25 years series.

As the 42 companies are down to 37, it causes some reflection for the future. Great, emerging companies will always be on the radar screen of larger, well-financed suitors. If growth cannot be internally generated through research and development efforts, larger companies will need to acquire growth and next generation products or technology. With interest rates still historically low, the borrowing necessary to buy these young, up-and-comers is not a significant issue. Investors will reward mature companies if they acquire intelligently and strategically.

Continue reading Checkfree, another one of my picks, gets bought out

Checkfree, another one of my picks, gets bought out originally appeared on BloggingStocks on Thu, 02 Aug 2007 15:05:00 EST. Please see our terms for use of feeds.

Well, there goes another one of our top 25 for the NEXT 25 years! This morning it was announced that giant medical device company Medtronic (NYSE: MDT) will acquire Kyphon (NASDAQ: KYPH) for $71 a share in an all cash transaction. Great deal for Medtronic and a great deal for Kyphon shareholders. Unfortunately, that takes our NEXT 25 list down to 22 companies left. Hewlett-Packard is acquiring Opsware and Philips of the Netherlands is acquiring Color Kinetics (NASDAQ:CLRK). Now, I have to find the three replacement companies to complete our list of 25!

Medtronic, I have contended for years, is the premiere medical device company in the world. The company is the franchise player in the cardiac world with a multitude of products. The staple of products ranges from cardiac surgical tools to pacemakers and implantable cardiac defibrillators. Medtronic's spinal franchise has had its share of struggles. The company has been set on working with younger patients with spinal afflictions. Kyphon, on the other hand, is very strong in working with older patients with its products that address osteoporosis. This affliction attacks nearly 700,000 woman annually in the United States alone. Kyphon's minimally invasive surgical devices and patented bone-cement were fast becoming the products of choice by surgeons.

The acquisition by Medtronic puts Kyphon's excellent product suite into the best distribution sales and marketing force the medical device industry has ever seen.

Meanwhile, I will continue my research to provide you with 3 more companies to round out our list of the top25 stocks for the NEXT 25 years.

Georges Yared is the CIO of Yared Investment Research.

Top 25 stocks for the NEXT 25 years: Medtronic to buy Kyphon originally appeared on BloggingStocks on Fri, 27 Jul 2007 12:03:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• In the systems technology sector, JP Morgan initiated coverage on CommVault Systems (NASDAQ: CVLT) and Double-Take Software, Inc (NASDAQ: DBTK) with Overweight ratings, Isilon Systems (NASDAQ: ISLN) and Opsware Inc (NASDAQ: OPSW) with Neutral ratings and Avocent Corp (NASDAQ: AVCT) with an Underweight rating.

• Auxilium Pharmaceuticals (NASDAQ: AUXL) was initiated with an Outperform rating at Cowen, which said AUXL's lead candidate, AA4500, is in pivotal testing for Dupuytren's contracture, which could be a $400M+ revenue opportunity.

• BioSante Pharmaceuticals (AMEX: BPA) was initiated with a Positive rating at Susquehanna, as the firm is positive on BPA's growth prospects for the transdermal estrogen market, upside potential from the female dysfunction market, and valuation.

• Morgan Stanley initiated shares of Lamar Advertising (NASDAQ: LAMR) with an Overweight rating and $77 target.

• SunTrust Robinson Humphrey initiated shares of Texas Roadhouse (NASDAQ: TXRH) with a Neutral rating.

• Morgan Joseph initiated shares of Metalico (AMEX: MEA) with a Hold rating.

• Stifel Nicolaus initiated shares of Tenet Healthcare (NYSE: THC) with a Sell rating and a $5 target.

Analyst initiations 6-21-07: AUXL, LAMR, OPSW and TXRH originally appeared on BloggingStocks on Thu, 21 Jun 2007 11:56:00 EST. Please see our terms for use of feeds.

When it comes to enterprise IT operations, every bit of automation you can get is a plus. A leader in the art of devising efficient automation systems is headquartered in Sunnyvale, California.

Opsware Inc. (NASDAQ: OPSW) provides data center software products that automate key server, software, and application operations. The company's programs re-allocate resources, control software updates, manage provisioning and automate change cycles for servers and business applications. The firm sells its products directly and markets them through resellers and systems integrators. Customers include General Electric (NYSE: GE), Home Depot (NYSE: HD), JP Morgan Chase (NYSE: JPM), Nortel Networks (NYSE: NT) and Target Corporation (NYSE: TGT).

Opsware pleased investors late last month, when it reported Q1 results that beat top line analyst estimates and matched predictions on the bottom line. Management also guided Q2 and FY08 expectations to levels in-line with analyst ranges. Deutsche Securities subsequently upgraded the shares to "buy" and declared an $11 price target. The news popped the shares out of a May "cup" into the June "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle."

Brokers recommend the issue with two "strong buys," four "buys" and seven "holds." Analysts expect a 14.6% growth rate, through the next year. The OPSW Price to Book ratio (6.38) and Sales Growth rate (28.66%) compare favorably with industry averages. Institutional investors hold about 78% of the outstanding shares. Over the past 52 weeks, the stock has traded between $6.23 and $9.90. A stop-loss of $7.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

Opsware Inc: Simplifying information technology originally appeared on BloggingStocks on Mon, 11 Jun 2007 11:40:00 EST. Please see our terms for use of feeds.

During the 1990's and early 2000's, the world witnessed a technology boom as had never before been experienced. Small, innovative companies founded by creative, visionary entrepreneurs became mega-billion dollar corporations with multi-billion dollar market capitalizations. The stories came at us like glorious movie scripts: the hometown nerd rises to super stardom: Bill Gates, Paul Allen, Michael Dell, Larry Ellison, John Chambers and many more newly-crowned titans were appearing in the society pages, as well as the business pages. Technologies were created that simplified our daily lives and enhanced productivity to levels never before thought of. Almost every human being was benefited by new, affordable technologies. Cars, TVs, appliances, PCs, cell phones,and several other products became fun, simple to use and affordable.

Along the way, massive fortunes were made by founders, employees, mutual funds and individual shareholders. Wall Street analysts also gained rock start status--maybe it was being in the right place at the right time.

Then came the nuclear winter for technology in late 2000-2001. Corporations and governments found themselves in the position of assessing what they bought and needing to monetize all these new technology assets. New spending came to near standstill. All of the investment geniuses who made the "easy" money were now facing losses and scrambling for the exits. Investing went back to the rules and principles that we all learned as beginners again.

No question about it: Microsoft, Oracle, Cisco, Dell, IBM, Hewlett-Packard Compaq, Intel and others are great American corporations. They collectively represent a few trillion dollars worth of market cap and multiple billions of annual profits. However, each titan of the 80's and 90's is facing its own issues of trying to re-grow the revenue and earnings base -- trying to recapture the magical secret sauce -- reminiscent of the older baseball pitcher who has lost 4-5 mph off his fastball and is trying to make it work with pitch location and craftiness.

But, investors are looking at the new, emerging group of companies that could dominate this decade and the next.

Continue reading The new young bulls of technology: Who will be the Microsoft of the 21st century?

The new young bulls of technology: Who will be the Microsoft of the 21st century? originally appeared on BloggingStocks on Wed, 11 Apr 2007 18:30:00 EST. Please see our terms for use of feeds.

Bill Martin, editor of FindProfit, looks at IT automation software maker Opsware (NASDAQ: OPSW) - and a "high profile" insider buy in the stock from former Disney (NYSE: DIS) exec, Michael Ovitz.

Martin notes, "Michael Ovitz, a director at the company, a longtime Hollywood power broker, and the one-time president of Disney, picked up 58K shares at $6.40 on March 14th, increasing his holdings to 941,300 shares."

The advisor points out that the purchase occured after the stock hit a 52-week low following its recent earnings report.

And this wasn't the first time Ovitz went into the market to buy shares; Martin notes that it was the seventh time since April 2004 that Ovitz has purchased shares of OPSW. This latest buy, he observes, was Ovitz's first purchase since June 2006.

Overall, he notes, Ovitz has bought 605,000 shares since May 2005, at an average price of $5.86, investing approximately $3.6M.

Martin says, "Ovitz has a history of well-timed buys at OPSW. He has managed to get in at favorable prices, and the stock has traded higher in the months following each of his previous six buys."

Like Ovitz, Bill martin has bought shares of Opsware on several occasions, He has traded the stock three times in his model portfolio. Now, following Ovitz's latest buy, he has decied to add the stock back to his own portfolio.

He states, "I would now argue that OPSW is one of the best growth stories in software today. While still not cheap, we believe the stock will grow into its valuation. TWe consider it a high-growth company with strong upside potential. he latest purchase buy Ovitz only adds to our conviction that the stock is a buy at current levels."

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.

Former Disney exec bets on Opsware originally appeared on BloggingStocks on Mon, 02 Apr 2007 09:03:00 EST. Please see our terms for use of feeds.