Sourcefire (FIRE) shares still overpriced

Submitted by theStockMasters... on Thu, 01/28/2010 - 19:24

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Financial News

Hey Beavis, Sourcefire, Inc. (FIRE) has gone down 20% in the last month. Yeah, Fire Fire!

However, here at the Masters, we still think shares of Sourcefire are overpriced, and have room to fall even more.

Back in December, thestreet.com named Sourcefire one of the top stocks to bank on in 2010. We think they are wrong.

With the huge selloff in Tech happening right now, where could Sourcefire shares end up?

If we look at Sourcefire's Forward Price to Earnings Ratio of 40.38, shares are trading at a much higher multiple than their competition. Best of Breed stocks like Symantec Corporation (SYMC) and Cisco Systems, Inc. (CSCO) are trading at half the multiple that FIRE is. Shares could fall to the $12 range within the year.

Another downside for the stock is insiders are selling shares like nobody's business:

Insider Trading	Relationship	Date	Transaction	Cost	#Shares	Value ($)	#Shares Total
McDonough Thomas M	President and COO	26-Jan	Sale	22.3	5,000	111,557	130,102
Roesch Martin F	Chief Technology Officer	22-Jan	Sale	22.7	2,500	56,651	983,984
Roesch Martin F	Chief Technology Officer	21-Jan	Sale	22.6	2,500	56,610	986,484
McDonough Thomas M	President and COO	19-Jan	Sale	24.2	5,000	120,840	135,102
Roesch Martin F	Chief Technology Officer	14-Jan	Sale	24.8	2,500	61,874	988,984
Roesch Martin F	Chief Technology Officer	13-Jan	Sale	25.1	2,500	62,721	991,484
McDonough Thomas M	President and COO	12-Jan	Sale	26.8	5,000	133,792	140,102
Roesch Martin F	Chief Technology Officer	8-Jan	Sale	26.3	2,500	65,821	993,984
Roesch Martin F	Chief Technology Officer	7-Jan	Sale	26.6	2,500	66,593	996,484
MCNITT DOUGLAS	General Counsel	5-Jan	Sale	27.4	1,094	29,926	81,161