Dykstra: Discipline Key in Facing Life's Curveballs
At this point, I believe all the bad news is priced into the stock. Yes, Symantec lowered its 2006 revenue forecast but is still projecting $5 billion of sales in the coming year, has minimal debt, more than $4 in cash per share on the books, and cash flow above $840 million in the past 12 months.
I would be a buyer right here in the $19.50 range. If you are a trader and like to book short-term profits, I would sell at the 21-day moving average of $21.69.
Because this company is so undervalued, I would set a stop-loss just above the 52-week low of $18.01. If it goes back to that area, I would buy more.
My other pick this week is Macrovision (MVSN), which develops digital rights management technologies. The company's software combats widespread, casual digital piracy while offering solutions that enable customers to electronically control the use of digital content and software, and to build significant new revenue models.Macrovision has built, and continues to add to, a large patent portfolio that helps differentiate its products and is important to its license-driven and solution-based business model. The company generates recurring revenue from a variety of sources by licensing the use of its patented technologies and software solutions. The selloff in this stock is way overdone. Not only was it knocked down, it looks like the punch came from Mike Tyson (during his prime). Macrovision has disappointed shareholders, for sure, but the company has $225 million in cash, no debt and $50 million in free cash flow. At 16 times next year's earnings, the stock presents a low-risk opportunity for a trade. From a technical perspective, Macrovision looks good for a couple points. I have a buy order in at $15.05, and would recommend selling at the first technical hurdle it will have to cross, which will be the 21-day moving average at $17.98. Or, if you want a little more holiday money, wait until the 50-day moving average at $18.56. Again, this stock is undervalued, so set your stop just above the 52-week low of $15.03.
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