ALDN

[DragonAMG]

I got back into ALDN today at $21.02

[David Randolph]

I got back into ALDN today at $21.02

Good move Dragon

Earnings will be out in July 19 and I can't wait for them, because analysts have quite conservative expectations and I see the company posting a very nice positive surprise:



Analysts are expecting just 24 cents and the company reported 26 cents in the year ago quarter. I think "no way ALDN will post lower EPS than a year ago", so everything seems set for a 10% plus positive surprise in my view. The company hasn't been buying back shares aggressively because it will post "lower than expected numbers".

Moreover the company's products make so much sense to me ... I'm even thinking of contacting them to send an e-Token for all subscribers of 3 Stocks Premium service, that way, only with an e-Token one could access the premium area of the website. Just a thought.

I think many software companies (like CIMT, for example), would find ALDN products very useful. Any web based service or software maker needs Aladdin or a close competitor to protect its intellectual property or content.

I'll continue holding ALDN with strong hands.

[David Randolph]

Oh oh oh, amazing behavior in ALDN yesterday. You see, the positive news (of the increase in the share buyback program) were released what, almost 20 days ago, and only yesterday the stock had a powerful white marubozu with volume above average of 306,300 shares changing hands.

The market works in strange ways.

Earnings will be released in July 19th and I'm fully prepared for a positive surprise, since, as we've seen, analysts are expecting just 24 cents against 26 cents over the year ago 2nd quarter.

I'll continue holding ALDN.

[David Randolph]

The following table shows ALDN's fundamental trends, with revenue and EPS rising steadily:



But, the basis of my investment in ALDN is that I expect revenue growth to accelerate from roughly 10% a year to 30% a year. That would justify a much higher share price. As I've explained in this thread, I expect the CIITE deal alone to provide almost all of the 30% average annual revenue growth.

But it can be more, because the company's software products and services ... uh la la, must be in high demand in the world right now.

I'll keep holding ALDN.

[David Randolph]

I have a 103 page Form-20 to study for ALDN, so we'll go by parts. For example, the following table shows the net profit margin improving over the years and justifies why I expect net profit margin to be 17.5% in 2009:



Technically the stock is approaching its recent highs and I expect it to make a bullish breakout to new highs. I'll continue holding ALDN.

[David Randolph]

ALDN's earnings will be out next Thursday, and I'm eager for them. I wonder if they'll provide an new 2007 guidance, already taking into account the Indian deal.

Technically, I've lost my annotated chart (Metastock technical issues, Ramsburg will have to format my computer on Monday), but you can see the stock is probably about to take out the recent highs.

I'll continue holding ALDN.

[David Randolph]

ALDN keeps rising, with earnings coming out next Thursday. I expect the company to beat analysts consensus expectations, so no doubt I'll hold through earnings. Not much to think about between now and Thursday.

I'll keep holding ALDN.

[David Randolph]

News out of ALDN yesterday:

• Aladdin Names Doron Cohen eToken CTO
PR Newswire (Mon 6:30am)

I don't expect this news to impact the share price.

But, earnings will be out on Wednesday. I've already opted to hold through earnings.

[Garoh]

David  earnings will be announced on Thursday june 19 Before market open 

[David Randolph]

David  earnings will be announced on Thursday june 19 Before market open 

You're right Garoh, thanks

Nothing to study today for ALDN, saving energy to scrutinize the results when they're published. I'll hold through earnings.

[Garoh]

Aldn has a cute chart now 

Will see 26.40 soon 

[David Randolph]

Aldn has a cute chart now 

Will see 26.40 soon 

I hope you're right Garoh

It was a nice close, at a new high, just before the earnings release which is expected to happen tomorrow before the open. I'll be particularly attentive to the guidance they give for the future. I'll update this analysis when we have the numbers, just leaving the updated chart for now:

[la-onda]

just fyi:
ALDN: To Release Q2 Results Jul 19 [BMO]
Wednesday, July 18, 2007 13:00ET

Aladdin Knowledge Systems Ltd. (Nasdaq NM: ALDN) is scheduled to release its Q2 financial results on July 19, 2007, before the market opens (BMO).

CONSENSUS ESTIMATES:

Q2 Revenue: $24.05 million
Q2 EPS: $0.27 per share

PREVIOUS PERIOD:

Prev Q2 Revenue: $20.85 million
Prev Q2 EPS: $0.26 per share

[la-onda]

above estimates, nice outlook:



Aladdin Knowledge Systems Reports Record Second Quarter Revenues and Net Income, Raises Fiscal 2007 Guidance
Thursday July 19, 7:00 am ET
Quarterly Revenues of $25.5 Million, Up 22% Year-Over-Year
Net Income of $3.9 Million, Up 16% Year-Over-Year; or $0.26 Per Diluted Share

TEL AVIV, Israel, July 19 /PRNewswire-FirstCall/ -- Aladdin Knowledge Systems Ltd. (Nasdaq: ALDN - News), the leader in Software DRM, USB-based authentication, and secure Web gateways, today announced financial results for the second quarter of fiscal year 2007, ended June 30, 2007. All results are prepared in accordance with generally accepted accounting principles in the United States.

Revenues for the second quarter of 2007 were a record $25.5 million, an increase of 22 percent from the $20.9 million reported for the same period in 2006. Software DRM revenues for the second quarter of 2007 were $16.5 million, an increase of 13 percent from the $14.6 million reported in the same period in 2006. Enterprise Security revenues for the second quarter were a record $9.0 million, a 44 percent increase from the $6.2 million recorded in the same period in 2006. Revenues for the first six months of 2007 were $50.6 million, an increase of 16 percent from the $43.7 million recorded in the first half of 2006.

Net income for the second quarter of 2007 was $3.9 million or $0.27 per basic share and $0.26 per diluted share and compared to second quarter of 2006 net income of $3.3 million or $0.23 per basic share and $0.22 per diluted share. Net income for the second quarter of 2007 included $0.15 million for equity-based compensation expenses compared to $0.6 million in the second quarter of 2006. For the first six months of 2007, net income was $7.7 million, or $0.53 per basic share and $0.52 per diluted share, compared with net income of $7.1 million or $0.49 per basic share and $0.47 per diluted share for the first six months of 2006. Net income for the first six months of 2007 included $0.6 million for equity-based compensation expenses compared to $1.1 million in the first six months of 2006.

Yanki Margalit, Chairman and CEO of Aladdin Knowledge Systems stated, "Aladdin delivered an outstanding performance for the second quarter of 2007, reporting all-time high quarterly revenues and net income, while generating strong cash flow from operations. The success of our strategy of investing in a portfolio of innovative Software DRM and Enterprise Security solutions is clear as both operating divisions posted double digit year-over-year organic growth rates, including record revenues from our Enterprise Security division. Our second quarter results were driven by positive demand across Aladdin's portfolio of security solutions. Based on the strength of our first half results, as well as our positive view of business conditions for the second half of the year, we have raised our full year 2007 revenue and EPS guidance.

"With a $10 million share repurchase program announced and completed during the second quarter of 2007, as well as the subsequent announcement of an additional $10 million share repurchase program, we are committed to leveraging the strength of our operating cash flow, balance sheet and the successful execution of our strategy to deliver long-term value to our shareholders," concluded Margalit.

Cash, cash equivalents and marketable securities totaled $87.7 million at June 30, 2007, down $3.1 million from $90.9 million reported as of year end 2006. While the Company generated positive cash flow from operations of $8.5 million during the first half of 2007, the Company used approximately $10 million in cash to purchase shares under the recently announced share repurchase programs.

Financial and Operating Highlights

-- Record quarterly revenues and net income of $25.5 million and $3.9 million, respectively.

-- Double digit year-over-year organic growth in Software Security and Enterprise Security.

-- Record quarterly Enterprise Security business revenues of $9.0 million, an increase of 44 percent year-over-year.

-- Cash flow from operating activities in the second quarter totaled $4.6 million.

-- $20 million in stock repurchase programs announced during the quarter.

-- 464,973 common shares repurchased during the quarter at a total cost of $10 million.

-- Appointed David A. Collins as Aladdin North America's vice president of sales for eSafe and eToken.

Quarterly Product Highlights

-- Aladdin announced the general availability of HASP HL software protection, licensing and distribution solution for Microsoft's Windows CE (x86)(TM) and Aladdin HASP SRM for Microsoft's Windows XP Embedded(TM) operating system.

-- Announced that Frost & Sullivan, a global growth consulting company, named Aladdin the market leader in the Software Digital Rights Management (DRM) Market in its April 2007 analysis "World Content Protection and Digital Rights Management Markets."

-- Frost & Sullivan named Aladdin the recipient of its 2007 Global Award for Product Innovation, recognizing Aladdin HASP's leadership in the software DRM market and its unparalleled innovation in providing software developers trusted protection, licensing and distribution solutions.

-- Beijing-based Hanwang Technology Co. Ltd., the largest provider of intelligent recognition solutions in China, will deploy up to 18,000 Aladdin HASP software protection keys to secure Hanwang products against piracy and unauthorized use.

-- One of the world's largest rental car companies will deploy Aladdin eTokens to meet payment card industry data security standard compliance requirements.

-- Unisys Corporation will deploy more than 28,000 Aladdin eToken smart cards to provide employees with integrated physical/data access.

-- Announced deployments of Aladdin's eSafe SecureSurfing(TM) solution by several ISPs including:

-- Mumbai-based SecureSynergy Pvt Ltd., the first managed security service provider in India to deploy the Aladdin eSafe SecureSurfing solution for its customers.

-- Internet Xpress, a Northeast Washington-based ISP, is using eSafe SecureSurfing to provide its residential and business ISP customers with "clean-pipe" Internet access.

For further information on product highlights, please refer to the press room on the Company's Web site which can be found at http://www.aladdin.com/news/2007/index.aspx.

Future Business Outlook

Based on current business conditions and expectations, Aladdin management has raised its guidance for fiscal year 2007.

Revenues for fiscal year 2007 are now expected to be between $100 million and $106 million, up from the previously stated range of $95 million to $102 million. The Company reported $89 million in revenues in fiscal year 2006.

Fiscal year 2007 diluted earnings per share are now expected to be in the range of $1.00 to $1.12, up from the previously stated guidance range of $0.90 to $1.09. The Company reported diluted earnings per share of $0.93 in fiscal year 2006.

The Company currently anticipates equity-based compensation expenses to be approximately $0.2 million per quarter for the second half of 2007. Due to the variable nature of these expenses, Aladdin had previously expected quarterly equity-based compensation expenses to be in a range of $0.4 million to $0.6 million per quarter.

The Company undertakes no obligation to update its estimates.

[David Randolph]

Thanks for posting the results la-onda

• Aladdin Knowledge Systems Reports Record Second Quarter Revenues and Net Income, Raises Fiscal 2007 Guidance
PR Newswire (Thu 7:00am)

On Yahoo Finance expectations were:



And actual results were EPS of $0.26 (diluted) and revenue of $25.5 M, so, better than expected. The company also raised full year 2007 guidance:

«Revenues for fiscal year 2007 are now expected to be between $100 million and $106 million, up from the previously stated range of $95 million to $102 million. The Company reported $89 million in revenues in fiscal year 2006.

Fiscal year 2007 diluted earnings per share are now expected to be in the range of $1.00 to $1.12, up from the previously stated guidance range of $0.90 to $1.09. The Company reported diluted earnings per share of $0.93 in fiscal year 2006.»

I don't know if this already takes into account the Indian deal, and that's the big question. I'm going to have to listen to the conference call to possibly have an answer, or a clue, about this issue.

Revenue growth from a year ago levels was 22% and I have 25% in my valuation model (but that takes into account the Indian deal). The company's historical growth rate has been 11%, so growth accelerated in Q2 2007.

Net profit margin was 15.21%, a bit below the 17.5% I expected in my valuation model, but that's for 2009.

ALDN is trading at roughly 21.7 times 2007 EPS while companies in its industry trade at an average of 41 times earnings.

So, good results, I'll keep holding ALDN.