A few months ago, my girlfriend told me we had to watch the new hit series Bling Empire on Netflix. If you haven't seen the show, it follows around a group wealthy Asian-Americans living in California. Interested in how their families were able to amass such massive wealth, I did a quick Google search. I leaned over to my girlfriend, and exclaimed, "Wow, did you know how Jaime got so rich? Her father started Fortinet! He's also the inventor of firewalls and VPN!" While my girlfriend followed the show for its drama and fashion, I was reaching for any sort of connection I could to my growth stock research.
Cybersecurity stocks have been a hot industry over the last few months. This makes sense given all the companies that now have people working remotely. Zscaler has been on a monster run the last few months, which gives me added confidence that FTNT may be ready to run again.
While looking at its chart, what most impresses me about Fortinet is that it was up ten weeks in a row in 2021! This type of uptrend is very rare. That sort of buying is not your cousin Mike or Aunt Suzy buying. It is big funds and institutions coming in that are bullish on a company's future. Indeed, fund ownership is up 15% over the last year with well-respected Fidelity Contrafund also owning FTNT. Insiders also currently own over 10% of FTNT's shares which is a sign they too are bullish on Fortinet's future. From a fundamental perspective, I really love the five quarters of accelerating sales coupled with a healthy 51% return on equity. Clearly, this is a company that knows how to increase revenue and run their business in an efficient manner. Finally, strong action in Upstart, Nvidia, and Tesla give me the feeling that growth stocks may be ready to resume a strong uptrend - another sign that FTNT may be ready for another move higher.
Fortinet currently looks like it is building a flat base. I will look to buy it if it can clear recent resistance on volume.
Risk right. Sit tight.
-Tom
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