Citigroup is upbeat about software in the second half of 2007, and includes Check Point Software Technologies Ltd. (Nasdaq: CHKP) as one of its stock picks. The banks says, “We believe now may be one of the best times to be invested in software as the sector has tended to outperform in second half, valuation has retreated to 2007 lows, demand fundamentals are attractive on accelerating PC unit growth, and sector is relatively shielded from mortgage-related credit woes.”
The bank adds, “While the first half is typically a period of slow demand and negative pre-announcements, this year has been healthier with many large vendors reporting strong second quarter results, though stocks did not reflect the strength. For the second half, we expect continued strong fundamentals to be accompanied by stock outperformance.”
Citigroup did not include Check Point in its list of companies to be wary of during the second half, because of “vendors' exposure to the financial services industry, which represents roughly 20% of overall IT spend and could be indirectly pressured by mortgage-related losses.”
Published by Globes [online], Israel business news - www.globes.co.il - on August 15, 2007
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