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CHKP: Buy the Market's Overreaction

Stocks in this article: CHKP JNPR CSCO

NEW YORK ( TheStreet) -- It never ceases to amaze me to see just how inconsistent investors really are when it comes to either offering a standing ovation or applying punishment to stocks based on their earnings results. It seems lately that Wall Street has an unspoken set of standards applied to some stocks that are not required for others.

Embarrassingly, this is something (although not new) that I probably will never get use to: how does one conduct comparable or relative analysis based on factors that may or may not matter to analysts? Sometimes this can be catastrophic for investors.

Some stocks can get away with reporting results that were considered "less bad" while others get hammered for missing the slightest of expectations -- even to the upside. Remarkably this happens consistently with companies that are within the same sector. Fairly or unfairly, this is where enterprise security company Check Point Software (CHKP) finds itself after a post-earnings selloff that saw the stock plummet to new 52-week lows, whereas rival Juniper (JNPR) saw its stock rise after posting results that were merely "not as bad as expected."

Double-Checking the First-Quarter

For the period ending in March, the company reported earnings of $143.6 million, or 68 cents per share -- topping the $122.1 million, or 57 cents per share it reported in the same period a year earlier. Adjusted earnings excluding stock compensation expenses and other items arrived at 74 cents a share, while analysts polled by FactSet were expecting earnings of 72 cents a share. Revenue grew 11% to $313.1 million from $281.3 million also topping analysts' expectations of $312.9 million.

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