Symantec Corporation (SYMC): Shares consolidating in bullish 'flag'

Symantec Corporation (NASDAQ: SYMC) provides software and services that address risks to computer security, information availability, policy compliance and system performance. Its programs protect against viruses, establish firewalls, filter content, detect intrusions, manage remote access and provide virtual private networking. The firm also offers security assessment, consulting and outsourced security management. Symantec has operations in more 40 countries. McAfee (NYSE: MFE) and Microsoft (NASDAQ: MSFT) are major competitors.

The company pleased investors last week, when it reported fiscal Q3 EPS of 33 cents and revenues of $1.52 billion. Analysts had been expecting 29 cents and $1.45 billion. Revenues grew fastest in the Europe, Middle East and Africa region, popping 26% year over year. Management also guided Q4 EPS to 33-35 cents (30 cent consensus) and Q4 revenues to $1.51-$1.55 billion ($1.48B consensus). The stock popped into a bullish 'flag' consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with four 'strong buys', seven 'buys', 19 'holds' and one 'underperform'. Recent price targets fall in the $19-$24 range. The SYMC Price to Sales ratio (2.49), Price to Book ratio (1.29), Price to Cash Flow ratio (11.86) and Price to Free Cash Flow ratio (9.92) compare favorably with industry, sector and S&P 500 averages. Institutions own about 93 percent of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $14.54 and $21.32. A stop-loss of $14.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.