There’s a BOGO Sale on Allot Communications Ltd. (ALLT)

The world’s top value investors love it when their best stocks ideas are selling at bargain-basement prices. For those investors, companies offering fire-sale prices become no-brainer buys. So regular investors like you and me would do well to emulate the masters and look at companies offering a “buy one, get one” sale on their stocks.

Considering the rise of the mobile Internet, you’d expect Allot Communications Ltd. (NASDAQ:ALLT) to be doing much better than it is. It sells deep packet inspection (DPI) gear to fixed and mobile broadband networks to optimize over-the-top Internet traffic. OTT, as it’s called, is content, applications, or video (but particularly video) that is delivered over the Internet instead of through a service provider’s network. Think of watching Psy’s “Gangnam Style” YouTube video on your smartphone (OK, make that Megan Fox’s bubble bath Super Bowl commercial instead). Allot’s gear makes that experience smooth and seamless.

As obvious as the need is for it’s technology, Allot’s stock languishes, having lost half its value over the past five months. Still, you’ll want to do your own due diligence before buying in to see if this is really a chance to pick up a quality stock at a severe discount.

Allot Communications snapshot

Source: FinViz.com. N/A = not available; Allot Communications doesn’t pay a dividend

Let’s just make sure there’s nothing more seriously wrong with it before you go and plug it into your portfolio.

Giddy yap!
Google Inc (NASDAQ:GOOG) found that a half-second delay in returning search results caused a 20% drop in search traffic. The market researchers at Gomez.com say online shoppers expect a website to load in two seconds or less because a three-second delay will have them abandoning a site. Amazon.com, Inc. (NASDAQ:AMZN) agrees that as little as a 100-millisecond delay will cause a significant drop in sales. It’s the same concept today with video. More than a second or two of buffering, and the user is on to the next thing. If it happens too often, maybe the user is on to a new network.

Unclogging the pipes
Allot’s DPI technology polices the content of data being sent, identifies it, prioritizes it, and routes it to the proper location. If it finds a virus, it can block it, and if it identifies peer-to-peer downloading abuse, it can throttle back data transfer speeds. Analysts consider it the leading contender to win Verizon Communications Inc. (NYSE:VZ)‘s business to deploy DPI technology as it implements a controversial “six strikes” policy to combat piracy. Violate the rules too often, and you’ll find your speed reduced to a mind-numbingly slow 256 kbps. AT&T Inc. (NYSE:T) will also roll out its version and will punish violators by blocking their access to various popular websites.