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Almost everyone who has surfed the Internet understands the potential for assault from hackers, spammers and other cyber villains. Among the best known defenders of a computer system's integrity is an outfit headquartered in Santa Clara, California.
McAfee (NYSE: MFE) provides computer security solutions for home and business systems. Offerings include anti-virus and anti-spyware services; encryption and backup applications; and programs used to stop unwanted e-mail. The company also provides consulting, support, and training services and has strategic alliances with such industry specialists as Cisco Systems (NASDAQ: CSCO), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT). Earlier in the week, it announced the $350 million acquisition of SafeBoot, a developer of security software for laptops, smartphones, and other mobile devices.
MFE shares rose last week, on favorable analyst remarks and rumors of potential acquisition interest by Dell (NASDAQ: DELL).
The move popped the shares out of a September "cup" into the October "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".
Brokers recommend the issue with six "strong buys", ten "buys" and eleven "holds". Analyst see a 13% average annual growth rate, through the next five years. The MFE Price to Book ratio (3.46) and EPS Growth rate (78.26%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 90% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $25.89 and $40.79. A stop-loss of $34.35 looks good here. Note that the company is expected to report Q3 results on October 25th, after the close.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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Reader Comments (Page 1 of 1)
10-20-2007 @ 10:05AM
Shawn Cain said...
Larry,
You fail to mention McAfee Sordid past. The fact that since 1998 it has systematically stolen from share holders. It has until January to restate it's earnings or face delisting by the NYSE, because of back dating options, which cost share holders $150,000,000.
I'm sorry to say, but just like almost all profiles I read about this company you omit the most important. The part about integrity , and honesty, and the fact that at the same time it is a security company. Would you trust this company, that has a 10 year history of theft, to protect your computer.