Thursday, May 28, 2009

Trade: Bought TerreMark Worldwide and Hartford Financial

Made a few purchases in our accounts today when the market was testing 890 which I think will be the low at least for now.

Terremark Worldwide (TMRK) is a new stock we've started following based on the $20M purchase of shares by VMWare (VMW). VMW is a very respected technology company and its impressive that they made an investment in TMRK. Its also important to note that the stock currently trades below that purchase price of $5. That purchase price was somewhat above the stock price at the time of the announcement as well. VMW wanted into this stock so we've followed. TMRK also reported nice Q1 results which surprised me to see that basically a hosting (ok, managed IT infrastructure services) company actually had a solid report. Actually reporting earnings which is impressive for a sector that typically only focuses on EBITDA. EBITDA can only take you so far. The other thing that impressed us was that TMRK provides the 'infrastructure' services for both usa.gov and data.gov. Since almighty Obama has a plan to move a ton of government data to the data.gov site it is worth noting that they are working with TMRK. Combine the 2 moves and I'm willing to invest without doing as much homework. VMW has the ability to push alot of clients to TMRK and has good visibility into the company. Its alsow worth noting that they had the largest quarterly booking in Q1 of $32M (not significantly above) and deal sizes were 50% higher then last year. Impressive considering the economy. Added shares to the Growth fund and client accounts.

  • “VMware has worked closely with Terremark for years, and during that time it has distinguished itself as a leader in delivering VMware virtualization, security, and business continuity to customers of all sizes and in all industries,” said Dan Chu, Vice President of Emerging Products and Markets. “This investment in Terremark underscores the importance of this partnership and our belief in their ability to leverage our technologies as part of the VMware vCloud initiative to develop reliable and scalable cloud computing solutions.”

Hartford Financial (HIG) was added with the stock hitting the 20ema. This has been a solid entry point for a while. Any break below and we might jump back out. FastMoney reported a large about of put buyers suggestion that somebody expects downside pressure. Or it could just be longs adding protection. We'll see. Added to client accounts.

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