Over the past year, shares of Symantec (Nasdaq:SYMC) have had a nice ride, going to $19 from just over $12.  In fact, in early May, the company posted a solid earnings report and the stock price hit a three-year high.

In that recent quarter, Symantec showed strength in both its security software and storage business segments.  Revenue increased 9.3% to $1.67 billion and profit beat Wall Street’s consensus expectation. 

So what’s driving the resurgence with Symantec, and can the good times continue?  Here’s a look at the pros and cons:

Pros

Extensive product offerings.  Symantec’s security software spans consumer brands like Norton to advanced enterprise software.  And they are well-regarded, with long histories and deep customer footprints.

As for the storage business, there are many high-end products that produce recurring revenue. 

Mergers and acquisitions.  Over the past couple years, Symantec has struck some key deals.  These include companies like VeriSign’s (NASDAQ:VRSN) e-commerce certificate business, PGP and Guardian Edge.  The result is that Symantec has moved into key growth markets. 

Secular growth.  There are some major growth trends in technology like cloud computing, smartphones, big data and virtualization.  And yes, Symantec has products for all these markets. 

Cons

Competition.  Symantec has fierce rivals in all its main businesses.  In the antivirus market, the competition includes McAfee, which is now owned by Intel (Nasdaq:INTC) and Microsoft (Nasdaq:MSFT). 

Then, in the storage market, some of the rivals are IBM

(NYSE:IBM) and Hewlett-Packard (NYSE:HPQ).  What’s more, Oracle (Nasdaq:ORCL) has become a potential threat because of its acquisition of Sun Microsystems.

Distraction.  In 2004, Symantec spent $13 billion to buy Veritas Software, which was a big storage provider.  However, the synergies did not materialize. 

As InvestorPlace’s Hillary Kramer noted in a recent article, it probably makes sense to spin off the storage business.  It should create more shareholder value and lessen the complexities of Symantec’s business.

Legacy businesses.  There are certain segments, such as archiving and antivirus software, that are low-growth, commodity businesses.  True, these provide strong cash flows,  but they can weigh down on Symantec’s growth rate. 

Verdict

As the economy recovers, IT spending is ramping up.  No doubt, Symantec has the scale to benefit from large contracts.  In the latest quarter, the company snagged 13 deals in excess of $10 million.

But perhaps the most important driver for Symantec is the growth in emerging technologies, especially mobile.  Companies are having lots of difficulties managing the influx of smartphones and tablets from their workers.  To this end, Symantec has been aggressive with investments in mobile security products.  For example, the company has a beta product for Google’s (NASDAQ:GOOG) Android phones. 

Finally, Symantec’s shares are selling at a reasonable valuation.  The stock price is trading at 9 times pretax earnings and 2.6 times revenue. 

All in all, the pros outweigh the cons on this stock – especially for investors looking for a conservative way to track emerging trends in technology.

Tom Taulli’s latest book is “All About Short Selling” and he has an upcoming book called “All About Commodities.”  You can find him at Twitter account @ttaulli.  He does not own a position in any of the stocks named here.