Computer Security Index
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average rating: 3.50 / 2 ratings
Created by Guest
DESCRIPTION:

Date updated:03-29-2007

This portfolio consists of companies that focus on Computer/Internet security. The idea is twofold:
- Internet security is only going to get increasingly complex. Companies can't do without the services offered by the companies in this index.
- The big guys: MSFT and ORCL will acquire in the space.

symbol name last price % change open
  • +
  • SYMC
    Symantec Corporat
  • $16.01
  • +2.10%
  • $15.53

Symantec, like many good companies, got hit by a failed integration of an acquisition. The idea was right, lets buy Veritas, a provider of storage software, because every corporation that needs to enhance their storage systems, will also need to secure that stored data. And they will either use us, as SYMC probably reasoned, or a competitor like MSFT. The integration, though, has gone slower than people thought it would, despite initial excitement about the idea, and the stock has faltered. However, what intrigues me is that its faltered to the extent that quality value-oriented and activist hedge funds have been scooping up shares of the stock. The company has a $15bb market cap, almost $1bb in net cash, and over $1.5bb in cash flows, giving it a multiple over cash flows of less than ten. And analysts are expecting solid growth, despite the integration troubles with Veritas. Analysts expect earnings to go from 95 cents in the year ending March, 2007, to 1.10 for the year ending March, 2008.

People owning SYMC also tend to own: CSHCTRPJNJLGBTLVSMKLQMAR

TheStreet.com Rating: D What is this?

  • +
  • MFE
    Mcafee Inc
  • $39.13
  • 0.00%
  • $38.76

Forward P/E of 17, trades for just 11x trailing cash flows. $1.24bb cash in the bank. 20% YoY Revenue growth. David DeWalt as the new CEO comes from EMC. There is a big link between storage solutions and security (how do you secure the data being stored?). The upside of this is that it could be a new focus for MFE to get enterprise customers. The downside is that it might temporarily take them off the table as an acquisition candidate.

People owning MFE also tend to own: CTXSSYMCABNAIGBKCERJEWJ

TheStreet.com Rating: A- What is this?

  • +
  • TMIC
    Tmic
  • $0.00
  • N/A
  • $N/A

Makes antivirus software. Similar stats to MFE. Trades for 10x cash flows, 30% margins (that are decreasing due to competition in the space), almost 20% revenue growth. $870mm cash in the bank. My guess is it gets acquired.

People owning TMIC also tend to own: MSFTNOVLCHKPFIREMFESYMCTMWD

TheStreet.com Rating: No Rating What is this?

  • +
  • CHKP
    Check Point Softw
  • $23.76
  • +0.89%
  • $23.63

$1bb cash in the bank. No debt. Makes firewalls. Morgan Stanley recently downgraded it saying its hard for it grow market share in the space. Still, with a forward P/E of 13 and a great balance sheet it could be an acquisition candidate. The need for firewals isn't going anywhere.

People owning CHKP also tend to own: AEOSCRYPHNRPAYXTCHCTRLGCOSI

TheStreet.com Rating: A- What is this?

  • +
  • TMWD
    Tumbleweed Commun
  • $0.00
  • 0.00%
  • $N/A

Microcap. $150mm mkt cap. $30mm cash in the bank. No debt. Trades at a forward P/E of 13.

People owning TMWD also tend to own: ACTISFNTSPSSVDSIAMDBKSBPUR

TheStreet.com Rating: D What is this?

  • +
  • FIRE
    Sourcefire
  • $12.66
  • -2.24%
  • $13.06

Recent IPO. Probably IPOed in order to raise money, compete, and get acquired. Its already popped off the IPO and unlike the rest of the stocks on this list, doesn't make money.

People owning FIRE also tend to own: APKTARUNAUTHAVAVBBNDBLOGCAVM

TheStreet.com Rating: C- What is this?

  • +
  • MSFT
    Microsoft Corpora
  • $21.40
  • 0.00%
  • $21.42

Ultimately, the stock to beat. Drastically improved security features in the operating system with Vista.

People owning MSFT also tend to own: AAPLAMDCSCODELLGOOGIBMINTC

TheStreet.com Rating: C What is this?

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