Apart from this another positive aspect for the company is its strong balance sheet with no debt along with regular buy backs. In 3Q12, it purchased ~3.1 million shares for ~$191 million and the remaining ~$223 million is authorized for further buy back till FY12. Moreover the company also approved a new ~$2.5 billion shares repurchase program which will start after the completion of the current program. The new one is expected to complete in three years after the commencement. On the whole I feel that a strong balance sheet, focus on online platform and regular buybacks would enhance the investors’ return in 2013.
F5 Networks, Inc. (NASDAQ:FFIV)
F5 Networks recently announced its 1Q13 results which were slightly below the analyst consensus. The company posted net sales of ~$365 million below the estimate of ~$368 million, but up by ~13% on y/y basis. The EPS of ~$1.14 was also lower than the estimate of $1.16. I feel this miss was mainly due to the fiscal cliff which impacted its sales performance for the federal government segment. As a result, its product sales witnessed an increase of just ~4% y/y in this quarter. The company anticipated a mixed next quarter with EPS in the range of ~$1.21-1.24 higher than the analyst estimates of ~$1.20.
Despite the mixed results and outlook, I still feel confident about the company’s product line and expect its product revenue to jump after 2Q13. F5 Networks would focus more on its product line with new launches which would provide a perfect combination of price and performance. The company is all set to roll out its Solar TMOS operating system which includes 76 new features and an all new application delivery firewall solution. It will also introduce new ADC appliances which include low end 2000 series, high end BIG-IP 10200 and an 8-blade VIPRION 4800 chassis. I expect the company’s product revenue growth to increase from ~2% in 2Q13 to ~8% in 3Q13 and to ~11% in 4Q13. F5 Networks will further see the benefits from various Cisco ACE replacements. It won three large deals with big enterprises which were earlier Cisco’s customers. Cisco earns ~$200 million annually with ACE and I see this as a big opportunity for the company to expand beyond the core ADC platform. The company has delivered a good ~26% CAGR in its EPS in the last five years. And considering its product revenue growth, I expect the same trend to continue in the future.
Conclusion
To sum up, I feel both Bed Bath & Beyond Inc. (NASDAQ:BBBY) F5 Networks, Inc. (NASDAQ:FFIV) stock prices are recovering after hitting the lower side in the last year. This provides a good entry point for the investors looking at their strong growth prospects for 2013 and beyond. Similarly Citrix would also see the benefits from its project Avalon pour in from mid-2013 providing a long-term growth opportunity.
The article You Should Not Miss These Cash Rich & No-Debt Stocks originally appeared on Fool.com and is written by Madhu Dube.
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