No matter what kind of market environment we’re in, there will always be great companies to own and invest in — and that’s especially true right now. We’re entering a period of transformative investment opportunities.
The company I want to talk to you about today is sitting in a prime location to profit from this new world of technology. In fact, the company is really changing the way companies make money, and it’s all through technology.
The company is grabbing onto some of the most boring and complex information a company has and turning it into not only something that’s interesting, understandable and something that can make them a whole lot of money as well.
The company is Splunk Inc (NASDAQ:SPLK), which sounds funny but is actually based on the word “spelunking,” which is the act of exploring a cave. Splunk explores the world of big data through its application software that offers the leading platform for Operational Intelligence.
Splunk is in a very unique position in the industry, as it makes “machine data” — which is essentially all of the behavior and activity of its clients’ customers, users, transactions, applications, servers, networks and mobile devices — accessible, usable and valuable.
In other words, SPLK’s products allow its customers to take all of the data that most people don’t understand — and therefore ignore — and turn it into information that they can then monetize.
Splunk is in all the hot places right now including the cloud, industrial data, the Internet of Things (IoT), business analytics, online industries, healthcare, retail, communications, energy, utilities and even more. In fact, I’d even go so far as to compare SPLK to Microsoft Corporation (NASDAQ:MSFT).
I’ve talked about SPLK stock four times on my Fox Business show, Making Money with Charles Payne, and we’ve made money on it every single time. Well, I’m back on the Splunk bandwagon today because I think both Splunk and SPLK stock will continue to do well.
In its fourth-quarter 2014 report, Splunk reported adjusted earnings of 9 cents per share, which easily beat estimates for 4 cents per share. Revenues were also better than expected, growing 48% to $147.4 million. Gross margins fell but only slightly, from 88% to 86%. So, I don’t see this as a big deal.
More importantly, both deferred revenues and cash from operations were up big to finish out the year. First-quarter 2015 results for SPLK stock are expected after the close on Thursday, May 28, and I’ll be watching.
Overall, I like Splunk a lot and believe it will do extremely well as we move deeper into the world of technology and big data. However, I will add the caveat that SPLK is a volatile stock, which is important to keep that in mind if you’re considering jumping in.
As long as you are willing to weather the storm, I believe SPLK stock has the potential to be a big winner.
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