Blue Coat Systems (NASDAQ:BCSI) designs, develops, markets and supports proxy appliances. Based on Blue Coat SGOS, a custom, object-based operating system with integrated caching, these proxy appliances leverage existing authentication systems to enable flexible policy enforcement down to the individual user. The Blue Coat ProxySG appliances combine proxy support of most Web protocols with integrated URL filtering, content security, Web-virus scanning, instant messaging control, peer-to-peer control and streaming control.
Blue Coat Systems is one of our "old favorites" and the stock is once again enjoying investor interest after the company posted fiscal fourth-quarter earnings that more than doubled on robust revenue. Blue Coat's quarterly profit increased to $2.8 million, or $0.21 per share, up from $1.4 million or $0.11 per share, in the same period last year. The company also issued an optimistic first-quarter outlook, projecting sequential sales growth of 12-15%. Analysts reacted positively to the forecast with First Albany upgrading the issue to a "buy" in anticipation of rising demand for software that protects against the invasive Internet threat known as spyware. From a technical viewpoint, a reasonable support level exists near the the sold (put) strike at $20 and traders who agree with a bullish outlook for BCSI should consider this position.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put JUL 20.00 IYU-SD
Target Price = $0.45 Open Interest = 346
Potential Profit (5 contracts @ $0.45) = $225
Initial Margin (5 contracts) = $2,725
Return on Investment (max) = 6.1%
Cost Basis in Stock = $19.55
Days to Expiration = 41