Why F5 Networks, Inc. Shares Popped

Is F5 Networks' jump meaningful? Or just another movement?

Jan 23, 2014 at 5:48PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of F5 Networks, (NASDAQ:FFIV) rose more than 10% during Thursday's intraday trading, then settled to close up around 5% after the company not only released solid fiscal first quarter 2014 results, but also issued encouraging guidance and increased its existing share repurchase program.

So what: Quarterly revenue rose 11% year over year to $406.5 million, which translated to a 7% increase in adjusted net income to $1.22 per diluted share. By contrast, analysts were looking for net income of $1.19 per share on sales of just $396.33 million.

Better yet, F5 asserted its current quarter revenue target is $408 million to $418 million, with non-GAAP earnings per share of $1.23 to $1.26. The midpoint of both ranges easily exceeds current expectations for earnings of $1.22 on sales of $405.07 million.

Finally, F5 authorized another $500 million for the company's existing stock repurchase program, bringing its current total amount available for repurchases to $781.3 million -- and that's after F5 spent roughly $200 million repurchasing 2.4 million shares of common stock last quarter.

Now what: However, given F5's relatively sluggish revenue and earnings growth, I can't help but think investors would be better off if management instead chose to issue a dividend in lieu of its massive buybacks. And while the business appears healthy, I still don't think the stock looks particularly cheap, trading around 30 times last year's earnings, and 17.5 times next year's estimates.

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Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of F5 Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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