Symantec Corp. $18 - Nasdaq symbol SYMC

SYMANTEC CORP. $18 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 867.3 million; Market cap: $15.6 billion; WSSF Rating: Average) makes software that helps protect computers from viruses and electronic attacks. Its best known product is the top-selling Norton Anti-Virus program. Symantec continues to cut its reliance on sales to consumers by increasing its corporate operations. Security products and services for businesses also give it steadier revenue streams than consumer software sales. As part of this strategy, Symantec recently acquired Altiris Inc. for $1.05 billion. Altiris’s products let computer administrators easily install and manage software across a wide variety of computers attached to a network. The company has also agreed to buy Vontu Inc. for $350 million. Vontu’s software helps companies secure sensitive data. Symantec has worked with Vontu for several years, and its familiarity with Vontu’s products reduces the risk of this purchase. In its second fiscal quarter ended September 30, 2007, Symantec’s revenue rose 12.7%, to $1.42 billion from $1.26 billion a year earlier. Earnings before restructuring costs rose just 0.8%, to $263 million from $261 million. However, per-share earnings grew 11.5%, to $0.29 from $0.26, due to Symantec’s aggressive share repurchases. The stock has moved down lately on fears that a slowing economy could force companies to spend less on new software. However, it now trades at 16.4 times the $1.10 a share Symantec should earn in fiscal 2008. That’s cheap in when you consider that the company spends 16% of its revenue on research. New products from these outlays should help fuel Symantec’s longterm growth. Symantec is a buy.

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