The fourth quarter of the year is traditionally the strongest quarter for performance for technology stocks. One technology stock that flies under the radar, but is a good value on a 10% pullback, is Symantec (NASDAQ:SYMC).
“Symantec Corporation provides security, storage, and systems management solutions internationally. The company’s Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. Its Security and Compliance segment provides solutions for endpoint security and management, compliance, messaging management, data loss prevention, encryption, and authentication services to large, medium, and small-sized businesses, as well as offers solutions through its software-as-a-service (SaaS) security offerings. This segment’s products enable customers to secure, provision, and remotely manage their laptops, PCs, mobile devices, and servers.” (Business Description from Yahoo Finance.)
7 reasons Symantec is a buy at $18 a share:
- It has beat or met earnings the last six quarters. The average beat over consensus over the last year has been over 10%.
- SYMC has a strong balance sheet, low beta (.89) and is selling at just 7.5 times operating cash flow.
- It has a forward P/E of just over 10, which is a 20% discount to its five year average.
- SYMC is selling near the bottom of its five-year valuation range based on P/S and P/CF.
- It has good technical support at $16 (see chart):Click to enlarge
- September channel checks look positive for good revenue growth.
- The stock price is under analysts’ price targets. Credit Suisse has a $25 price target on SYMC, and median analysts’ price target is $22.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SYMC over the next 72 hours.