McAfee: Hold shares

Posted Nov 13th 2009 2:20PM by Joseph Lazzaro
Filed under: Technology

McAfee' Inc.'s (MFE) shares have meandered since the July 5, 2009 Buy recommendation at a price of $40.82, Hence, I'm placing a hold on the company's shares. Here's why:

The company reported Q3 EPS of 62 cents, which beat the First Call Q3 EPS estimate of 61 cents, but of course Wall Street was not satisfied, and sold the stock. It seems with most companies it takes a 10% or better quarterly 'earnings beat' to keep institutional investors satisfied these days.

In the process, McAfee's shares have formed a short-term double-top at/near $46 – a bearish sign, hence the Hold rating. I've also raised the Sell/Stop Loss to $34 from $17, to guard against any unexpected developments. In a month or so, I'll review McAfee's performance again. The First Call F2009/F2010 EPS estimates for MFE are $2.42 to $2.69.

Stock Analysis: Don't Buy McAfee Inc.'s shares at at this time. If you bought shares in July, Hold the shares. Revised Sell/Stop Loss: $34.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: McAfee, MFE