BOSTON (CNN/Money) - The other day, when I should have been working on this column, I spotted an online quiz asking how much money in reduced productivity employers lose because of workers who play fantasy football at the office.

The correct answer was pretty surprising: $36.7 million per day, according to Challenger Gray & Christmas.

While I don't think we'll hear Alan Greenspan chide ESPN for its role in the nation's productivity drain anytime soon, it's stats like these that Websense lives for -- and that have driven up the company's stock price to the mid-$40 range, briefly flirting with a new 52-week high on Monday.

Websense (WBSN: Research, Estimates) makes content-filtering software aimed at companies, both large and small. Think of it as the boss looking over employees' shoulders.

It knows which Web sites each employee is visiting. And if employers want to stop workers from shopping on eBay during company time, it blocks that site and thousands of more obscure ones.

Research firm IDC says Websense, which began operations eight years ago, is the market leader in secure content management, with 24.2 percent of the $4.2 billion market. IDC predicts the worldwide market for SCM software will hit $7.5 billion by 2008.

Any way you look at it, this little company is on fire. (It debuted at No. 8 on this year's B2 100 list of the fastest-growing tech companies.)

Websense has some of the strongest fundamentals in the software space. Its gross margins are 93 percent (by comparison, Microsoft's are 82 percent), with last quarter's operating income coming in at 33 percent of its $26.6 million in revenue. The company has recorded 19 consecutive quarters of growth and carries no debt.

No wonder it's cruising along near its 52-week high, up more than 90 percent on the year.

"The company has some pretty good opportunities in the next year," says Joe Maxa, a vice president with Dougherty & Co. "I don't see any significant challenges to its business model in the near term."

But is there any gas left in this rally? Websense will report its third-quarter earnings in about a month, and that's a long time to sustain this kind of anticipatory swing.

It's difficult to recommend a stock with a forward price/earnings ratio of about 36, but I'm bullish on the company and think it still deserves a "buy" rating. For starters, its P/E isn't an accurate reflection of its worth, since Websense records its subscription revenue on a deferred basis, metering out revenue across the months.

"The earnings numbers are artificially depressed," says Donovan Gow, an analyst with American Technology Research, who has a "buy" rating on the company. "This is one of the highest-quality names out there, but at this level you have to be more cautious."

That's true. At the current level, I wouldn't recommend this stock for a short-term pop. But for the long term, it's hard not to like Websense.

Bears on the company typically bring up two concerns, neither of which I think is accurate.

First, they cite a low barrier to entry into the space, with almost all ISPs offering content blocking in one form or another.

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In fact, the barrier to entry is quite high for Websense's corner of the corporate marketplace. The company has created a database of billions of Web pages, which it monitors and updates. This database forms its filtering engine, making it far more accurate and flexible -- and difficult to replicate -- than the simple keyword-based filters used by most ISPs.

Second, they ask whether Websense has a deep enough product line to survive as a stand-alone company.

This is a legitimate concern, but I look at it from the other side of the question. Plenty of acquisition-hungry companies are seeking the kind of top- and bottom-line growth Websense is sporting these days.

Given the high premiums recently paid for companies in the security and filtering space (Symantec's recent acquisition of Brightmail, for example), any acquisition of Websense will require a hefty premium. Which, of course, is a win for Websense investors.

Using the Brightmail premium of 14 times annual revenue, Websense, with $100 million in revenue last year, looks undervalued.

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