Sourcefire (FIRE) shares still overpriced

Posted January 28th, 2010 by theStockMasters...
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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


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