Stock Picks: Amazon, Alaska Air, Check Point

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McKenzie also boosted his full-year profit forecast to $4.60 per share from $4.40, given that Alaska's fuel hedging program is expected to help results in 2010.

"Separately, industry M&A is not finished in our view," McKenzie wrote. "And given its attractive West Coast niche, Alaska fares well under consolidation scenarios. And while Alaska's management has historically been opposed to M&A, we would argue the probability for a take-out going forward rises."

Check Point Software Technologies Ltd. (CHKP)

Stifel Nicolaus downgrades to hold from buy

Check Point Software Technologies reported a profit of 61¢ a share in the fourth quarter, excluding one-off items, vs. 50¢ a year earlier on a 25% gain in revenue to $272 million. With its results, released Jan. 28, the Tel Aviv-based developer of Internet security software beat the consensus estimate of 57¢ in earnings and $257.76 million in revenue.

Check Point attributed the results to its April acquisition of Nokia's (NOK) security appliance business and sales growth across all product lines and geographic regions, notably Asia-Pacific. The need for security has been highlighted recently by cyber attacks on Google's (GOOG) operations in China. Check Point said it will likely make one or two small technology acquisitions per year and would also consider buying entire companies. Chief Executive Gil Shwed said on a conference call that he believes customers are relatively optimistic and that he is "seeing more interest in new projects."

The company expects to earn 48¢ to 55¢ per share, excluding items, in the first quarter of 2010 on revenue of $232 million to $245 million. Earnings for the full year, excluding items, are projected at $2.20 to $2.30 per share on a revenue forecast of $990 million to $1.04 billion. The consensus estimate among analysts is for a first-quarter profit of 53¢ on revenue of $237.7 million and a full-year profit of $2.24 on $1.01 billion in revenue. Check Point also plans to expand its share repurchase program, spending as much as $250 million to buy shares this year.

Stifel Nicolaus (SF) analyst Todd Weller lowered his rating on the stock to hold from buy but said the company's "very solid" fourth-quarter results weren't a factor in the downgrade. He said in a research note on Jan. 29 that the valuation has returned to more normal levels due to market sentiment and positive earnings, plus the business growth effects from the Nokia acquisition. Those factors had underpinned Stifel's upgrade of the stock last year. Check Point shares dropped 4.8% to $31.94 in Friday trading.

"We feel Check Point's growth profile has improved," Weller's note said. "However, our feeling is that Check Point should still be viewed as a 10% grower on an organic basis."

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