Incredible Run For FireEye (FEYE); 6 More U.S. Retailers Hit By Target-Like Attack; Stock Market Update
Good morning to all. Soon to be suffering football withdrawal as the NFC and AFC champions will be crowned. So, get this update done and “get ready for some football!”
FIREEYE (FEYE), Cyber Security Firms Stocks — “On Fire”
What an incredible run for shares of the cyber security firm FireEye (FEYE). Shares of the company are up 68% just in the last two weeks and their stock closed Friday up $2.58, or 3.63% to $73.57. I put a stop in on half my shares on Friday at $70. So, can FEYE shares go even higher. Absolutely, but, if I did not own shares — not sure I would chase them here. Having said that, news this weekend that 6 more major U.S. retailers have been hit by a Target-like cyber hack — could act as a tailwind to push shares higher on Tuesday. Remember, the market can stay irrational, longer than you can stay solvent. The U.S. stock market is closed tomorrow (Mon., Jan. 20, 2014) in honor of the late Martin Luther King.
IntelCrawler, a cyber crime investigative firm reported late Friday that it has evidence that 6 more major U.S. retailers are currently under a Target-like cyber attack, according to the firms President, Dan Clements. Mr. Clements did not publicly disclose the names of the retailers but acknowledged his company was providing technical information related to the breaches.
Mr. Clements said that IntelCrawler had traced the Target breach to a 17yr. old Russian who created the BlackPOS malware — originally called Kaptoxa, which is Russian slang for potato. The 17yr. old apparently sold more than 40 copies of the malware (since the summer of 2013) to cyber criminals for $2k a copy and/or a piece of future “profits.”
So, despite FEYE’s remarkable run in 2014, stories like this one can only benefit companies like FEYE, Palo Alto Networks (PANW), Fortinet (FTNT), Barracuda Networks (CUDA), and InfoBlox (BLOX). I own shares in all of these companies. One I don’t have a footprint in; but, could also benefit is Imperva (IMPV).
Some notable facts about FireEye. The company currently owns a patent on how it isolates threats or breaches without having to “crash” the network or systems infrastructure; their recent acquisition of Mandiant provides the company with additional network security products in 2014 that are in use in 30 Fortune 500 companies; FEYE has had a 36k% increase in net revenues, and base growth in the past two years; and, the company has raised their earnings guidance ahead of their first quarter 2014 earnings report/release on February 11, 2014.
I am not selling FEYE here; but, I have a stop in on half my shares at $70 and I will buy on any dips or pullbacks not related to news and/or the fundamentals.
“Earings Season Gets Into Full Swing”
For the week last week, the DOW rose 22pts. or 0.1% to 16,458, while the (S&P) fell 4pts. or 0.2% to 1838.7, and the NASDAQ rose 23pts. or 0.6% to 4197.58.
Mark Hulbert, Editor of The Hulbert Financial Digest had a feature article in this weekend’s Wall Street Journal with the title, “This Bull Market Is Starting To Look Long In The Tooth.” Mr. Hulbert wrote, “the U.S. stock market is more overvalued than it was at the majority of the past century’s bull market peaks — according to six well known valuation ratios.” “That doesn’t mean the bull market is over,” he says, noting that “some past bull markets were even more overvalued when they topped out. Furthermore, no two market peaks behave the same way.”
“Nevertheless,” Mr. Hulbert says “the evidence suggests that the risks (of a healthy correction) are high. You may want to consider selling some of your stock holdings and building up cash.
Something to think about — especially with your big winners. Or, you can put stops in in case of a pullback. Stops aren’t perfect, especially if the stock gaps down sharply; but, it does help preserve some gains if you have been up significantly.
Tomorrow, Monday, is a Federal Holiday and the U.S. stock market is closed. Have a good week. V/R, RCP www.fortunascorner.wordpress.com