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Aruba Networks Seems Cheap But Is There Value?

I do wonder, though, why Cisco has not yet picked off Aruba, especially since Aruba has opted to not drop its prices. It would make sense for Cisco to acquire Aruba's best-of-class WiFi assets while also capitalizing on Aruba's strong margins. At that point, Cisco wouldn't need to sacrifice its own margins with aggressive discounting. With Aruba's stock trading at such depressed levels this is a situation that bears watching.

I'm not advising diving in head first in Aruba. But I believe there is considerable amount of value to be had -- despite the competitive pressures. In the meantime, though, there is urgency for Aruba's management to differentiate the business. And I think a focus on security and/or a combination of security and software will add tremendous long-term value while the WLAN market recovers.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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