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Optionetics Commentary

Tech World: Check Point Experiencing Strong Sales Growth in the US and Europe


Jeff Neal, Optionetics.com
March 3, 2009


Check Point Software (CHKP) develops, markets, and supports a range of software, combined hardware and software products and services for information technology security worldwide. The company offers its customers a portfolio of network and gateway security solutions, data and endpoint security solutions, and management solutions. Its solutions operate under a unified security architecture that enables end-to-end security with a single line of unified security gateways and enables a single agent for various endpoint securities. Check Point was founded in 1993 and is headquartered in Tel Aviv, Israel.

Check Point has solid fundamentals with great return on equity and a healthy cash flow. The latest earnings showed total revenues at $217.6 million, compared to $206.7 million in the fourth quarter of 2007. Net income was $86.5 million compared to $87.9 million in the fourth quarter of 2007. The company also indicated that their share repurchase program bought approximately 3.4 million shares at a total cost of $66.7 million and that they continued to experience good performance from all geographies, including the United States and Europe.

The underlying equity is showing a solid Elliot Wave-4 buy formation, projecting gains into the $26 per share by mid-April. The company has a liquid options market. The options currently extend through January of 2011, allowing the options strategist more than enough time to take advantage of the forecasted opportunity.

Figure 1: Daily Elliott Wave-4 Buy Formation for Checkpoint Software
(Source: Profit Source)
click here for larger view

Happy Trading.

Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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