As investors, we know that management matters. Ask anyone who owns shares of Apple today, or General Electric (NYSE:GE) during the Jack Welch era, or IBM (NYSE:IBM) during the Lou Gerstner years. (Big Blue under Gerstner was a multibagger of massive proportions.)
It's way too soon to know if Kevin Johnson can work similar magic as the new CEO of router maker Juniper (NASDAQ:JNPR) but, as the lead executive behind Microsoft's (NASDAQ:MSFT) failed bid for Yahoo! (NASDAQ:YHOO), the little we do know about him is encouraging.
Think about it. Before the more recent shenanigans, Mr. Softy first sought to buy Yahoo! at a very reasonable price. When CEO Jerry Yang asked for the unreasonable, Microsoft did what any reasonable suitor would do: It walked away.
But now, with Johnson gone, Mr. Softy has become the creepy boyfriend who's so desperate that he'll do anything -- anything! -- to win his beloved's heart. Good for a Hollywood flick, bad for investors pining for outsized returns.
So, Microsoft lets Juniper -- in need of a successor to CEO Scott Kriens ever since chief operating officer Stephen Elop left in January for (where else?) Microsoft -- poach the cool-headed Johnson.
Juniper needs him, or so appears to be the judgment of those who follow the stock in Motley Fool CAPS:
|
Metric | |
|---|---|
|
CAPS stars (5 max) |
*** |
|
Total ratings |
479 |
|
Bullish ratings |
420 |
|
Percent Bulls |
87.6% |
|
Bearish ratings |
59 |
|
Percent Bears |
12.4% |
|
Bullish pitches |
48 |
|
Bearish pitches |
15 |
Data current as of July 28, 2008.
I understand why: It's tough to let go of talent that's putting up good numbers against combative peers such as Cisco (NASDAQ:CSCO) and Brocade (NASDAQ:BRCD). But that's what Juniper has done: Second-quarter revenue improved 32%, per-share net income rose approximately 40%, and gross margin expanded by 30 basis points.
We can't know if Johnson has the talent to extract similar (or better) numbers from his team. But it's a fair bet that he's unwilling to overpay for marginal assets -- and that should be more than enough to keep Juniper on the growth track.
Get your clicks with related Foolishness:
- January's frozen tundra couldn't keep Juniper from smelling fresh.
- By March, it had finally put its billions to work.
