How did McAfee (MFE) make that kind of move just on security software? Didn't Microsoft (MSFT) just say -- admittedly for the 4 millionth time -- that it was going to give away free anti-virus software?

Buy - Price 38.04 on May 18
by Jefferies & Co.

McAfee hosted their annual investor event in New York City. Key Points: McAfee's goal is to become the largest dedicated security provider, a spot currently held by Symantec. By our estimates, McAfee is within a year of overtaking Symantec, although Symantec is likely to keep its large consumer lead for several more years... New consumer-focused family protection and backup products are coming. Family protection will be offered standalone in June, while the backup product (via a partnership with EMC) will be offered standalone by September, and as part of a suite in late 4Q/early 1Q. It will be priced at $50 to $60 per annum... Our $45 price target is 15 times estimated 2010 free cash flow/share of $2.66 plus $5.13, at the high end of the 10- to 15-times range for the security group. We believe the premium is warranted by high growth and market-share gains. Market cap: $5.9 billion.

Outperform - Price 35.09 on April 6
by Cowen & Co.

[CHKP $22.71]We view the [[CHKP $22.71]computer-security space[/CHKP $22.71]] as more sheltered from ongoing macro-economic pressures [than personal-computer sales]....MFE shares outperformed security peers in March, and we believe hold 15% upside potential versus the market over 12 months...Inputs suggest McAfee is...seeing healthy big-deal activity, even in a seasonally soft [period]...We believe investors underestimate the benefit seen by the consumer-security market from the Conficker worm [threat]....[which may be] one-time. Yet the induced spike in sales helps prove the value proposition of [security] products. [/CHKP $22.71]EPS: 2008, $2.01; 2009-E, $2.23. Market cap $5.5 billion.

McAfee has a stronger track record than Symantec and may prove more nimble in deploying new technology. Its stock, mostly flat this year, could easily jump 30% by next fall.

The Santa Clara, CA based computer software maker announced a plan to buy back $750 million in stock through July 29, 2009, higher than the $500 million program analysts had expected.

The company recently reported solid fourth quarter earnings and provided guidance that exceeded expectations on the Street . In the fourth quarter, net sales jumped to $356.5 million from $305.2 million, helped by 24 percent growth in McAfee's international business. Net income for the period, excluding items, was $75.1 million or 46 cents per share, 1 penny above analyst estimates. For the full year, net income grew 21 percent to $167 million, or $1.02 per share, from $137.5 million, or 84 cents per share.

CEO David DeWalt noted that while "I do worry a little bit about the macro [economic] climate, particularly consumers…we've been doing well. We've got new partnerships and a bunch of new contracts that keep us going."

Analysts were more than pleased with the news of a solid Q4, and full year performance topped off by solid guidance.

Daniel Ives of FBR Research noted, "While macro uncertainty remains a concern, McAfee is not seeing any signs of weakness in the field, which echoes positive comments we have heard from other security software vendors over the last few weeks."

Katherine Egbert of Jeffries & Co. also pointed out that, "we believe that McAfee is attractive at current levels, especially given the relative economic safety of the core security franchise." She has a BUY rating and a $43 price target, noting not just guidance but also the buyback.

McAfee (MFE) was upgraded from Peer Perform to Outperform, Bear Stearns said. Stock is worth $38 on a sum-of-the-parts valuation, and looks attractive following the recent pullback.

Also,Citigroup upgraded MFE from Hold to Buy. $42 price target. Estimates also raised as margins are expanding and the company's buyback should add to earnings.

Security software seems to be at less risk because it isn't viewed as a discretionary purchase. So, McAfee (MFE), Checkpoint (CHKP) and WebSense (WBSN) are less vulnerable to corporate spending constraints, Pritchard says

Outperform - Price 38.12 on Dec. 21
by Cowen and Co.
McAfee filed its past-due 2006 and 2007 10-Qs and 10-Ks on Friday afternoon [Dec. 21]. We found no major surprises, although detailed cash flows do point to more positive impact on billings from exchange-rate movements, something that is hard to predict and non-operational. With the restatement behind it, we expect the company to resume share repurchases, albeit offset to some degree initially by significant employee option exercise activity. We believe shares can outperform the market by 15% over the next 12 months.

McAfee (MFE) was downgraded from Outperform to Market Perform, Friedman, Billings Ramsey said. Valuation call, as the stock is up 40% on the year. $43 price target.

Wick is keen on the security sector; he has big bets on both Check Point (CHKP) and McAfee (MFE), which he thinks is having a revival under Dave Dewalt, its new CEO, and could eventually find a buyer, as well.

1) strongly increasing competition as Microsoft enters security market
2) anticipate greater difficulty gaining information Windows needed to secure systems (cf 1 - note msft can withhold info on the pretext of security concerns).
3 short position in mfe hedges against my exposure in msft in case pc growth is disappointing