In their Suncoast Equity model, Suncoast Equity Management uses its SEM-DIS (Suncoast Equity Management-Disciplined Investment System) method to help pick appropriate holdings. The SEM-DIS system is based on the same investment principles utilized by Warren Buffett and Benjamin Graham.
Suncoast Equity focuses on choosing businesses rather than stock picking. A quote from their website sums up the reason for this perfectly:
“We invest in businesses, not stocks. When we invest, we become part owners of a business. Therefore, our investment management commitment entails much more than simply buying and selling shares of stock. By focusing on individual companies, and not the stock market, we achieve a sustainable advantage.”
The top holding in the model is Check Point Software Technologies Limited (NASDAQ: CHKP), developers of both software and hardware technology security solutions.CHKP’s consistent history of exceeding analysts’ expectations suggests that secure networking remains in strong demand. CHKP is the second largest company in Israel and it is responsible for introducing the first commercially available firewall product.
In September, the news came out that Radware Ltd (NASDAQ: RDWR), another technology security solutions company with its international headquarters located in Israel, was close to being acquired by either Hewlett Packard Co (NYSE: HPQ) or International Business Machines Corp (NYSE: IBM). At the time the news broke, all companies involved declined to talk about the potential deal. Three months later, no acquisition has taken place and there are some rumors that there may be more companies involved in an auction for RDWR – as per Israeli analyst Shlomi Cohen in Globes (12/14/10 ).
What does this have to do with CHKP? Cohen that it might be a good idea for CHKP to make some acquisition overtures toward RDWR. He believes the ever-increasing popularity of (and reliance on) cloud computing and online data backup systems create fertile ground for customized security systems.
