When recapping first-quarter numbers against the main themes in the communications solutions sector, investors should focus on names with strong secular growth outlook that are basically at the cutting-edge of those trends and in mobile data or data growth, in general, says Daniel Meron, an Analyst at RBC Capital Markets.
“Broadly speaking, the overriding theme in my coverage is the ability to gather information, or if you will, communications solutions, and then, how do you process and analyze the data?” he said. “And we are seeing that there are various companies along the axis depending on where they are in the maturity of the cycle and their positioning within the industry.”
On a long-term basis, given secular growth, good potential to risk, Meron likes Allot Communications Ltd. (ALLT), which provides network-traffic management for carriers and enterprises. He says Allot has strong numbers, and has specifically continued its strong growth because carriers are looking to manage the data growth and benefit from that.
“If you go back to Allot, the management says data traffic is an overriding theme across the world for any mobile carrier. But you’ve seen the adoption of smartphones, or just the increased usage of broadband, over the network set up. So in that respect, companies like Allot can see growth even in macro-constrained areas, like Europe,” Meron said.
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