Selling software to the financial services sector was a pretty brutal market for any business to be in during the dark years of the economic slump – as investors in AIM quoted Corero Network Security (LON:CNS) could testify. Long term holders in the business haven’t had much to cheer about over the last three years but the influence of a new management team (and a new strategy) appears to be breathing new life into the shares.

Chairman Jens Montanana and operations chief Andrew Miller took Corero by the scruff of the neck in July 2010; first selling the flagging Financial Markets division and then raising £6.5 million for new projects. The remaining Business Systems arm continues to turn a profit by selling finance and admin software to education institutions, notably Academies, which have been unhooking themselves in increasing numbers from the central command of Local Education Authorities.

Perhaps of more interest, Montanana – who co-founded AIM and Jo’burg listed Datatec (LON:DTC) – set out to forge a future for Corero in network security, in other words helping mid-market business customers protect themselves from hackers and viruses. A year after his arrival, the company snapped us US-based Top Layer Security to give it the initial platform that was needed and renamed it Corero Network Security. So far, so good but the shares didn’t budge from sub-50p until earlier this month when the company raised another £4.5 million to develop the new division and produced a set of results that appears to have inspired more confidence.

While it remains loss making, Corero’s revenues jumped to £11.3 million from £3.0 million with interim sales growth of 308% amidst surging customer numbers: up 78 on the Network Security side plus another 192 Academies for Business Systems.

Unsurprisingly, the fundamentals deliver a mixed picture on Corero’s Stockopedia Stock Report . The long history of losses quite rightly raise a few red flags, although , Montanana and Miller’s new strategy may take some time to filter through to the numbers. But optimists might say that the market is a forward looking mechanism and cite the strong share price momentum as a signal of things to come. Corero’s recent run propelled the stock to within touching distance of our 52 Week High Momentum Screen this week –…

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