symantec

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....

Sales of computer software could weaken over the next year, if a slowing economy prompts computer users to delay upgrades or new purchases. That’s why we feel investors should stick with leading software makers like these five, whose size and customer base will help them stay profitable and generate cash flow for new product development. However, we see only three as buys right now. MICROSOFT CORP. $34 (Nasdaq symbol MSFT; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 9.4 billion; Market cap: $319.6 billion; WSSF Rating: Above average) is the world’s largest maker of computer software. Its flagship products, the Windows operating system and the Office suite of business programs, dominate their markets....

SYMANTEC CORP. $17.52 (Nasdaq symbol SYMC; SI Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 867.3 million; Market cap: $15.2 billion) reported 12.6% higher revenues in its second fiscal quarter ended September 30, 2007, to $1.42 billion from $1.26 billion. Excluding one-time write-downs, earnings per share rose 11.5%, to $0.29 from $0.26 a year earlier. Symantec continues to invest heavily in research — spending $221.1 million in the latest quarter, or a high 16% of sales. This spending will let it maintain its lead in the competitive and rapidly changing virus protection, firewall, vulnerability management, security services and intrusion detection industries in which it operates....

APPLE INC. $184.70, Nasdaq symbol AAPL, earned $3.93 a share in its fiscal year ended September 29, 2007, up 73.1% from $2.27 in the prior year. The gains came from strong demand for Apple’s new iPod music players, iPhone and Mac computers. Revenue rose 24.4%, to $24.0 billion from $19.3 billion. Apple is debt free, and has $15.4 billion ($17.64 a share) in cash. It spends roughly 12% of its revenue of $27 a share on research. Apple’s strong reputation for design and convenience, as well as its loyal customer base, should continue to spur growth. However, at 40.7 times its fiscal 2008 profit forecast of $4.54 a share, the stock is vulnerable to a big drop if the company fails to meet its revenue and earnings targets. Apple is still a hold for aggressive investors....

SYMANTEC CORP. $18.70 (Nasdaq symbol SYMC; SI Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 882.5 million; Market cap: $16.5 billion) is now starting to realize some of the benefits of its 2005 acquisition of Veritas, which has strengthened its corporate security products. The $13.5 billion deal was one of the biggest software industry acquisitions ever. Meanwhile, Symantec’s consumer business continues to do well, including benefiting from the new Microsoft Vista operating system. In the three months ended June 30, 2007, Symantec’s sales rose 7.7%, to $1.4 billion from $1.3 billion a year earlier (all amounts in U.S. dollars). Earnings per share were unchanged at $0.10. But excluding unusual items, earnings per share were $0.29 in the latest quarter, up 20.8% from a year earlier. Symantec continues to implement its restructuring plan to cut costs. The plan includes a 5% reduction in its workforce. It’s also buying back shares issued in the Veritas purchase. The company spent $1 billion on share repurchases earlier this year and plans to buy back a further $2 billion worth of its stock....

WASHINGTON MUTUAL INC. $35.07, New York symbol WM, bundles its mortgage loans into securities and sells them to other investors. That helps it raise cash to make more loans. However, increasing volatility and rising interest rates in some debt markets are making it harder for Washington Mutual to sell mortgage-backed securities. This lack of liquidity has hurt Washington Mutual’s stock price in the past few weeks. But the company has steadily cut its exposure to the housing market since the start of the year. Cost cuts, growth in its retail banking business and the expansion of its credit card operations cut its reliance on mortgages and should let it keep paying its $2.24 dividend, which provides a 6.4% yield. Washington Mutual is still a buy for long-term gains....

LEON’S FURNITURE $13.89 (Toronto symbol LNF; SI Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 70.9 million; Market cap: $985.3 billion) has split its shares on a four-for-one basis. Leon’s is still a buy. YAMANA GOLD $13.10 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 353.3 million; Market cap: $4.6 billion) and NORTHERN ORION RESOURCES $6.43 (Toronto symbol NNO; SI Rating: Extra risk) (604-689-9663; www.northernorion.com; Shares outstanding: 154.1 million; Market cap: $990.8 million) are encountering resistance in their joint takeover bid for Meridian Gold, $30.90, symbol MNG on Toronto....

INTERNATIONAL BUSINESS MACHINES CORP. $105.33, New York symbol IBM, has agreed to pay $745 million for Telelogic AB of Sweden. The price is equal to 40% of the $1.8 billion or $1.21 a share that IBM earned in the first quarter of 2007. Telelogic’s software helps its customers in the aerospace, defense, telecommunications and automotive industries streamline and test complex engineering projects. This is IBM’s 43rd software acquisition since 2001. Expanding by acquisition adds risk, but these purchases nicely complement IBM’s computer hardware and services businesses, and expand its client base. Software will probably account for half of IBM’s profit by 2010. IBM is a buy....

NVIDIA CORP. $34 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 362.0 million; Market cap: $12.3 billion; WSSF Rating: Average) earned $0.33 a share in its first fiscal quarter ended April 29, 2007, up 37.5% from $0.24 a year earlier. Revenue rose 23.8%, to $844.3 million from $681.8 million, as strong sales of notebook computers spurred demand for its video chips. Nvidia’s chips now have 60% of the notebook market. Demand for video chips will continue to grow as manufacturers of mobile phones and video games enhance the graphical features of their products. But the company faces growing competition from Advanced Micro Devices, which recently purchased video chip specialist ATI Technologies. Nvidia is a hold for aggressive investors....

DOW JONES & CO. INC. $55.80, New York symbol DJ, jumped 55% after News Corp. offered to buy the company for $60.00 a share, probably in some combination of cash and News Corp. stock. News Corp. owns several media properties, including Fox Broadcasting and the New York Post. It feels The Wall Street Journal and other Dow Jones publications and web sites will strengthen the new business-news cable channel it plans to launch later this year. The Bancroft family owns 82.4% of Dow Jones’ class B shares, which carry 10 votes each. This plus their regular common stock holdings gives them 64.2% of the total votes. Right now, roughly half of the family’s members oppose the News Corp. offer. However, a formal rejection could trigger a lawsuit accusing the company’s directors of breaching their fiduciary duty to act in the best interests of all stockholders....