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Thursday, July 27, 2017

Why HPE Might Want to Move on Gigamon

#Gigamon (GIMO) could sooner or later sell itself to the highest bidder. According to a Reuters report, Gigamon hired Goldman Sachs (GS) to help it explore a sale. Shortly after the report, Needham analysts raised their price target on Gigamon to $50 from $34, saying that the odds that Gigamon could be acquired had significantly increased. Needham went further to list possible buyers of Gigamon like #Cisco (CSCO), Hewlett Packard Enterprise ( #HPE ), #PaloAlto Networks (PANW), and #Fortinet (FTNT) on that list.

One common thing about these companies mentioned in relation to the Gigamon acquisition is that they are interested in cybersecurity. They are betting on security to add appeal to their core products. Thus, they could benefit from Gigamon’s network monitoring and security technology.

Strategic fit for HP Enterprise

Of these potential buyers of Gigamon, HP Enterprise could be the hungriest. The company is not only busy hunting for strategic tools that could boost demand for its core server and storage products, but its CEO Meg Whitman has also recently talked about acquisition becoming a bigger part of its strategy.

Therefore, #Gigamon, with its traffic monitoring and security software, could be a strategic fit for #HPE as it seeks to transform its fortunes. The above chart shows how #HP Enterprise’s top line has compared with consensus estimates in the last few quarters.

Need for tuck-in acquisitions after pruning season

#HPE has eliminated several units since it separated from its computer and printer sibling HPE Inc. (HPQ). The pruning hasn’t just unlocked funds for reinvestment, but it has also created room for tuck-in acquisitions to help push back against rivals such as #DellTechnologies (DVMT) and #Amazon (AMZN).

http://marketrealist.com/2017/06/analyzing-american-electric-powers-dividend-yield/

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