Symantec Overview

Copyright 2009 by Morris Rosenthal - - contact info

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Copyright 2009 by Morris Rosenthal

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Notes on trading SYMC stock for investing

Symantec Corporation is the main American play in computer security stocks. The corporate version of their Norton AntiVirus software is very popular with IT managers across the boards, but they have plenty of competition in the consumer sector from upstart Eastern European companies that win market share with free entry-level versions of their products. Consumer products accounted for much of their revenue, especially through preinstalled software licensing. Computer security stocks trade on news as much as fundamentals, or at least it seemed so in the past. Anytime a major virus or worm threat came along and proved how bad all of the software was, people would rush to buy the stocks on the assumption that everybody would buy more security products. Symantec does a very good job bundling trial versions of their software with new PC purchases, so after the trial period (I think mine was 90 days), customers would sign up to pay a yearly fee.

Symantec was the only company in my software round-up to report negative earnings per share, but they are also one of the few companies I'd be ahead on if I bought them ten years ago. But they are clearly a non-growth stock, and perhaps an anti-growth stock if Microsoft should get Windows 7 to run reasonably well, in terms of security. The PC security field has always been based on artificial threats that don't have to exist and could be engineered out of existence, in return for changing the way operating systems (primarily Windows) grants trust to programs, so in the long run, Symantec will need to evolve or die, just like the rest of us.

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