Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

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Headquartered in Austin, Texas, <a href="https://www.smartkarma.com/entities/15648" target="_blank" data-smartkarma-citation="entities:15648:1">Solarwinds Inc (SWI US)</a> is a leading global provider of IT infrastructure management software systems. The company is getting ready for an IPO in the NASDAQ exchange this week with a price of US$17 to US$19 per share. At the mid-point of the IPO price range (US$18 per share), the company's market cap would be US$5.4 billion, and would raise about US$756 million. </li>
<li>SolarWinds first went public in 2009. In February 2016, the company was acquired by private equity firms Silver Lake and Thoma Bravo for US$4.5 billion in a leveraged buyout. Both Silver Lake and Thomas Bravo are highly reputable private equity firms and these stakeholders should be mostly positive for the SolarWinds IPO.</li>
<li>One of the company's key strategies is to target focus on the technology professionals. According to the company, "it does not have an outside sales force or professional services organization. It does not wine and dine the C-suite. It does not sponsor golf tournaments or buy Super Bowl ads." Rather, the company markets and sells its products directly to the IT professionals, including network and systems engineers, database administrators, and managed service providers (MSPs).  </li>
<li>The company's major competitors include <a href="https://www.smartkarma.com/entities/15269" target="_blank" data-smartkarma-citation="entities:15269:1">Netscout Systems (NTCT US)</a>, <a href="https://www.smartkarma.com/entities/1064" target="_blank" data-smartkarma-citation="entities:1064:1">Intl Business Machines (IBM US)</a>, MicroFocus (MFGP US), CA Technologies (CA US), BMC Software, Nagios, Manage Engine, ConnectWise, Continuum, Datto, and Kaseya. This remains a fragmented industry ripe for consolidation. In terms of comparable companies, <a href="https://www.smartkarma.com/entities/15269" target="_blank" data-smartkarma-citation="entities:15269:1">Netscout Systems (NTCT US)</a> and CA Technologies (CA US) appear to be most comparable. Investors are also likely to take into consideration the recent acquisition of BMC Software by KKR. In addition, the recent software IPOs in 2018 including <a href="https://www.smartkarma.com/entities/27117" target="_blank" data-smartkarma-citation="entities:27117:1">Zuora Inc (ZUO US)</a>, <a href="https://www.smartkarma.com/entities/27060" target="_blank" data-smartkarma-citation="entities:27060:1">DocuSign Inc (DOCU US)</a>, and <a href="https://www.smartkarma.com/entities/27115" target="_blank" data-smartkarma-citation="entities:27115:1">Smartsheet Inc (SMAR US)</a> are likely be used as comparable companies for SolarWinds. </li>
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Headquartered in Austin, Texas, Solarwinds Inc (SWI US) is a leading global provider of IT infrastructure management software systems. The company is getting ready for an IPO in the NASDAQ exchange this week with a price of US$17 to US$19 per share. At the mid-point of the IPO price range (US$18 per share), the company's market cap would be US$5.4 billion, and would raise about US$756 million. 
SolarWinds first went public in 2009. In February 2016, the company was acquired by private equity firms Silver Lake and Thoma Bravo for US$4.5 billion in a leveraged buyout. Both Silver Lake and Thomas Bravo are highly reputable private equity firms and these stakeholders should be mostly positive for the SolarWinds IPO.
One of the company's key strategies is to target focus on the technology professionals. According to the company, "it does not have an outside sales force or professional services organization. It does not wine and dine the C-suite. It does not sponsor golf tournaments or buy Super Bowl ads." Rather, the company markets and sells its products directly to the IT professionals, including network and systems engineers, database administrators, and managed service providers (MSPs).  
The company's major competitors include Netscout Systems (NTCT US), Intl Business Machines (IBM US), MicroFocus (MFGP US), CA Technologies (CA US), BMC Software, Nagios, Manage Engine, ConnectWise, Continuum, Datto, and Kaseya. This remains a fragmented industry ripe for consolidation. In terms of comparable companies, Netscout Systems (NTCT US) and CA Technologies (CA US) appear to be most comparable. Investors are also likely to take into consideration the recent acquisition of BMC Software by KKR. In addition, the recent software IPOs in 2018 including Zuora Inc (ZUO US), DocuSign Inc (DOCU US), and Smartsheet Inc (SMAR US) are likely be used as comparable companies for SolarWinds. 


SolarWinds Corp IPO Preview (Part 1) - "Make IT Look Easy"

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection, rotations still seem to be the norm.  We have suggested that the current sector rotations are reminiscent of 1994. If conditions in the current market are indeed mimicking those of 1994, we would expect that sectors that are oversold are likely to bounce, and sectors that are overbought are likely to suffer pullbacks, which makes technical tools such as relative strength less viable.In our July Strategy we outline this thesis and highlight opportunities within the Technology, Health Care, Financial and Energy Sectors.

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection, rotations still seem to be the norm.  We have suggested that the current sector rotations are reminiscent of 1994. If conditions in the current market are indeed mimicking those of 1994, we would expect that sectors that are oversold are likely to bounce, and sectors that are overbought are likely to suffer pullbacks, which makes technical tools such as relative strength less viable.In our July Strategy we outline this thesis and highlight opportunities within the Technology, Health Care, Financial and Energy Sectors.

United States

NetScout Systems, Inc. designs, develops, manufactures, markets, and supports a family of products that enable businesses and service providers to manage the performance of computer networks and business software applications. The Company's Application Flow Management solution consists of data collection devices and analysis and presentation software.

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Netscout Systems (NTCT US)

SolarWinds Corp IPO Preview (Part 1) - "Make IT Look Easy"

Headquartered in Austin, Texas, Solarwinds Inc (SWI US) is a leading global provider of IT infrastructure management software systems. The...

Douglas Kim

U.S. Equity Strategy:

The last several months have been that of digestion and consolidation. While Sector and group leadership have taken a back seat to stock selection,...

Vermilion Research

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