There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

October 24, 2011 - Check Point Software Technologies Ltd. (CHKP-NYSE) develops, markets, and supports software, and combined hardware and software products and services for information technology (IT) security applications worldwide. The company offers a range of network and gateway security solutions, data and endpoint security solutions, and management solutions.

The company's endpoint security solutions provide various software blades that run on individual computers connected to the network, such as desktop computers, laptop computers, and other mobile devices. It also offers technical services consisting of technical customer support programs and plans, such as enterprise based support and collaborative enterprise support; certification and educational training on Checkpoint's products; and professional services in implementing, upgrading, and optimizing Checkpoint's products, including design planning, security implementation, and project management services.

In addition, the company offers ZoneAlarm solutions that protect consumers from hackers, spyware, and identity theft. It sells through a network of channel partners, including distributors, resellers, value-added resellers, system integrators, and managed services providers to enterprises, service providers, small and medium sized businesses, and consumers. The company was founded in 1993 and is headquartered in Tel Aviv, Israel.

Exactly one year ago, we featured Check Point. It was trading at $41 a share. Had you and I bought it, we would have earned almost 50% on our money. Now the question is: does it have more upside or is it getting to full valuation? Here's what we know.

Earnings continue to climb, as they have over most of the last 8 years. In 2003, they were 96 cents a share. Last year, they were $2.48. Twenty-seven analysts see $2.84 for 2011, then forecast $3.16 for 2012. In the fourth quarter, look for 81 cents compared to 73 cents last year. In a bad economy, finding stocks that increase earnings every year is a tough task. CHKP is one of those rare ones. Over the next 5 years, analysts see earnings growing annually, on average, 11.32%. In the last 5, they improved, on average, 15.72% annually.

Since late 2008, CHKP has gone almost straight up, even when most of the market had strong down drafts. The rise started at $16.60 and finished at $61.46 earlier this year. Now the stock is trading a little below that but well short of its all-time high of $118.60, set in 2000.

Product sales and licensing fees continue to grow with analysts seeing both increasing by 10% to 15% this year. Software updates and maintenance and service sales will most likely see the same improvement this year. International sales are contributing more to the top and bottom lines. Analysts expect next year's bottom line to benefit from bigger orders (over $50,000), cost cutting, and more international revenues. If global economies recover, expect more businesses to spend on network appliance solutions and security for IT.

Essential Numbers:
- Trailing P/E: 25
- Forward P/E: 19
- Price to sales ratio: 10.08
- Price to book: 4.12
- Operating margin: 50.59%
- Profit margin: 43.15%
- Return on equity: 18.85%
- Return on assets: 10.62%
- Revenues (last 12 months): $1.21 billion
- Total cash: $1.21 billion
- Cash per share: $5.87
- Total debt: 0
- Current ratio: 2.3
- Book value per share: $14.35
- 52 week change: 42%
- Shares Outstanding: 206.31 million
- Float: 159.18 million
- Held by insiders: 31.72%
- Held by institutions: 66.4%
- There is no dividend.

If global economies can gain more traction, expect analysts to raise their expectations for earnings as companies will spend more on security. But even if things were to slow, malicious software doesn't. Check Point's software will always be needed so new products and upgrades will continue to be in demand. Having said that, be aware that competition is fierce with Intel, Juniper and Symantec offering similar products and services. Of course, new competitors will always be trying to break through to this ever growing market.

Investors need to bridle some of their enthusiasm at this point. Valuation seems to be rather full as various ratios are at points that are rarely seen, ones like Price to book and Price to sales in particular. Of course, when a company delivers eye popping results like profit margin of 43% and operating margin of 50%, investors will always pay more. The question now is: will they pay even more to keep this star rising?

- Company Web site: www.checkpoint.com