I am removing Gigamon (GIMO) from the Next Wave Portfolio and locking in the profit on that position because the risk/reward balance for the stock at these levels is no longer favorable. Since being added to the Next Wave Portfolio in March 2015, Gigamon shares have gained 49%.  Gigamon should be able to deliver a solid second quarter because the company is going up against an easy comparable from last year. But I am concerned the company may face increased competition down the road now that NetScout Systems (NTCT) beefed up its packet monitoring capabilities with the recently completed purchase of Danaher’s VSS Monitoring unit. Sell Gigamon.

Qualys (QLYS), a leading provider of cloud-based enterprise security solutions, is added to the Next Wave Portfolio based on the company’s ability to drive accelerated revenue growth over the longer term thanks to a broadening product portfolio and an expanded sales channel. Revenue growth over the next two years is expected to average 24%. My price target of $49.35 is generated by applying a forward multiple of 8 to a 2016 revenue estimate of $210 million. Buy QLYS up to $39.50, with a Stop Loss at $31.00