Merrill Lynch is tipping Baltimore Technologies as a long-term buy for investors. Baltimore has announced a strong set of full-year results, although the stock market reacted negatively to a cautionary outlook statement based on a US slowdown.

Merrill Lynch believes this is an over-reaction, as many technology companies have made similar statements and much of the bad news had already been priced into the market. It points out that the security market should be one of the areas of technology that is least affected by a slowdown.

Merrill Lynch also believes Baltimore's competitive position is improving.