Stock Idea…Gigamon Inc

Stock Idea…Gigamon Inc

Symbol : GIMO

Exchange: NYSE

Market Cap : 1.4 Billion

Revenue : 311 Million
Three Year Revenue Growth : 30.4%
Forward P/E : 36.4
Investment Type : Small / Mid Cap Emerging Growth

Price : 39.25 
Investment Stem : Disciplined Growth Investors

Gigamon Inc develops designs and sells solutions and products that deliver visibility of traffic across networks. It serves global enterprises, service providers and governments.    

  

Gigamon Inc provides active visibility into physical and virtual network traffic, enabling stronger security and superior performance. Gigamon Visibility Fabric(TM) and GigaSECURE(R), the industry's first Security Delivery Platform, deliver advanced intelligence so that security, network, and application performance management solutions in enterprise, government, and service provider networks operate more efficiently and effectively.       

          

An emerging growth stock which is cash flow positive with no debt while being the market share leader in traffic visibility solutions. Founded in 2004, IPO'ed in 2013 on the NYSE. Have global offices in 20 countries, with over 2400 customers. Serving the federal, financial services, healthcare, retail and technology markets with 46 patents issued in the US and internationally. A leader in the disruptive Visibility market. A recurring revenue 'repeat purchase multiple' of 127 times. The leader in the waves of Visibility in the Security, Mobility and Public cloud markets.

The dreaded metrics from morningstar...

http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=GIMO&region=USA&culture=en-CA&ops=clear

The companies website...

https://www.gigamon.com/

Remember this is an emerging growth company so the usual value metrics will not apply. Midecap growth companies like this get more of their value from investments they expect to make in the future and less from investments they have already made. The value of their growth assets is both a function of how much growth is anticipated but also the quality of that growth. It is the return they make on the capital they have invested in their business. Remember our definition of return on invested capital (ROIC).

Check the stock out for yourself. It looks like an interesting investment idea to me. If you do decide to invest try putting on a third of your position and monitor the stock from there, if things look like there going to work out, you can always add to your position later. There is never a need to rush in and buy a stock. Take your time and have a good look at it. The market as a whole is pretty toppy right now. This stock could be going off at an even cheaper price in the autumn. The biggest problem when investing in the market is handling your own emotions. Try to think of yourself as a hard-nosed capital allocator who is patient and disciplined when investing his/her money.

And remember the risks involved when investing, especially in tech stocks where there is always the chore of attracting the best and brightest minds to come work for you. That being the case, pay attention to the corporate culture of a company, it should be an enticing place to work who values their employees (intangible assets). And keep in mind that some new company with a fresh crop of young propeller heads can come along and disrupt our disruptor stock. Remember we all face an unknowable future where anything can happen so it pays to be aware of the risks as well as the rewards when investing your money in the stock market.