Like Flies On Symantec

Not many original ideas come from Wall Street, which likely explains the herd metaphor. If there is one thing Wall Street is good at its extrapolation. Symantec is one of three software stocks I would categorize as midcap, value. The other two are BMC and CA Technologies. CA and BMC's stock prices have taken off on plans to return capital to shareholders and I believe Symantec is not too far behind.

CA Technologies, nudged on by an activist investor, agreed to return large amounts of capital to investors. The stock shot up and is up over 30% for the year. BMC followed suit and today issued debt, likely in order to repurchase more shares. BMC shares have also performed well, extending the gains on today's news. It will not take long for investors to figure out what Symantec should do.

I predict that analysts and investors will soon be on Symantec's case like flies on excrement. I also believe that Symantec should be repurchasing shares aggressively as they are trading with a 14% free cash flow yield. I added to my Symantec position today and now own a fairly large position. Symantec already has a decent sized share repurchase plan in place and with the low valuation this should be enough for the shares to appreciate over time. But any stronger action to return cash to investors should speed up the process.

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