I had mixed feelings on Check Point Software Technologies (CHKP) a year ago, as I thought the shares were priced for some decent returns, but also didn’t see much going on with the business that would break it out of its prolonged doldrums where growth was concerned. Since then, the shares have basically kept pace with the S&P 500 and Palo Alto (PANW), but have been left behind by smaller players like Fortinet (FTNT), Sailpoint (SAIL) and Zscaler (ZS).

This current environment may be about as good as it can get for Check Point, with security spending holding up as an essential area where enterprises won’t look to cut costs, work-from-home driving some incremental sales opportunities, and Check Point’s large recurring revenue base providing some security at a time when there are still a lot of modeling uncertainties. I’m still worried about Check Point’s relatively modest leverage to cloud security,

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In a number of my recent blog posts, I have written about the “V-shaped” recovery unfolding in both the equity market and the economy. Economic data reported over the last two weeks continues to support this V-shaped narrative. Much of the recent economic releases are positive and the data, when plotted on a chart, trace out a V-shaped pattern as well.

Last week the New Orders Index reported by the Institute for Supply Management (ISM) in their manufacturing Report on Business showed new orders increased 5.1 percentage points to 62.5%. The report noted:

  • New Orders Index growing at a strong level, supported by the New Export Orders Index re-entering expansion, and
  • Backlog of Orders Index returning to expansion for the first time in five months.

Today’s report on retail sales shows total retail sales now exceeds pre-crisis levels. Clearly, the below chart shows the “V-shaped” recovery in this economic data

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