Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

The Top Tech Stocks for 2013

Companies / Tech Stocks Jan 09, 2013 - 01:47 AM GMT

By: Investment_U

Companies

David Eller writes: January is here and predictions for the coming year are rampant.

There are so many great cutting-edge technology companies and hopes for the next 12 months that it’s easy to lose your discipline and let greed take over.


I’d love to spend the next 500 words talking about companies like Tesla (Nasdaq: TSLA) and Facebook (Nasdaq: FB) and Google (Nasdaq: GOOG). But we’re at a triple top on the S&P. And even if companies meet their earnings expectations, companies with high valuations can drop as investors become more conservative.

As we’ve detailed in the past, a company’s share price is made up of the book value (or liquidation value) plus earnings potential. Even if the balance sheet is healthy and the company meets current earnings estimates, your $80 stock could become a $60 stock overnight if the expectation for future growth slows.

Since stocks like Facebook have few net assets and low (if any) current earnings, the expectations for future earnings have a huge impact on the share price. Here at Investment U, we prefer to follow tangible earnings growth rather than speculation. So for today’s forecast I looked through more established companies, with real assets, and at least one stable earnings stream in addition to a good case for growth. In short, if the growth story doesn’t work out as quickly as Wall Street expects, you won’t end up holding an empty bag.

After diligent research, I see the following four tech companies as standouts for safe outperformance in 2013:

•Intel (Nasdaq: INTC) has been left for dead. Semiconductor investors have been focusing on wireless and low-power rather than PC suppliers. That shouldn’t be a surprise since PC makers had a very tough 2012. The corporate PC refresh cycle was extended due to the weak economy. Tablets were becoming mainstream. Dell (Nasdaq: DELL) and HP (NYSE: HPQ) continued to disappoint. Intel tried to get into mobile computing, but the Ultrabook isn’t effectively competing with the iPad. However, the corporate computing market isn’t going away. Expectations are low, the stock is cheap… and with a 5% dividend, you are being nicely paid to wait for earnings to improve. The CEO transition will bring an increased focus on mobile, which will hopefully increase the number of design wins for Intel’s low-power Medfield product line.

•Apple (Nasdaq: AAPL) is loved by its customer base, but it remains a hardware company. After being disappointed by Dell and HP throughout 2012, professional investors have not been willing to acknowledge that Apple may be different, and that traditional hardware margin compression may not be in store for Apple. The fact is that Apple is selling a closed ecosystem of products, not commodity products that interact with third-party hardware. This is similar to IBM’s early days, but with one major difference: Apple provides a better user experience for its customers. Estimates as well as expectations have come down over the last two quarters, and Apple is now trading at less than 10x out year earnings.

The company merely needs to execute on its current product line to meet estimates and see a dramatic increase in share price. If it executes on a revised Apple TV product or builds out a Netflix-like, on-demand content offering, these new revenue streams would dramatically increase Apple’s earnings potential. It seems strange but a combination of execution and new product offerings at a time when expectations (and valuation) are low could drive 50% upside to its existing massive valuation.

•Synchronoss (Nasdaq: SNCR) may be the most widely used company that you’ve never heard of. It provides an activation platform for mobile services and recently expanded into cloud computing through its recent acquisition of NewBay. As an activation vendor, Synchronoss has a relatively stable and boring business that is likely to grow through tablet adoption. However, carriers are attempting to increase their service offerings and NewBay provides the infrastructure to allow the carriers to do it. Synchronoss has the relationships and NewBay has the infrastructure. The date marking the beginning of the recent run in the share price was the date of the company’s presentation at the Credit Suisse conference, November 28. Professional investors have been building positions, but the game is still in early innings.
•Teradata (NYSE: TDC) is a “big data” management vendor. All of the little bits of information that insurance companies and social media vendors collect and use needs to be correlated, stored and used to predict future behavior. This may mean you’ll get more direct mail and unwanted sales calls, but at least you can profit from this trend in the market.

Teradata is the most highly recommended vendor by Gartner group. It’s positioned in Gartner charts in “the upper right” quadrant for being the best executor, as well as the best innovator. The stock pulled back in the second half of 2012 due to weakness in U.S. business, but revenue and profits held up in Europe. Why? When the economy is difficult, companies scrutinize their books more heavily. There are two bright spots for Teradata. First, it’s a rapidly growing business in Asia where, as a spinout of NCR, Teradata has a unique competitive advantage. Also, a unified appliance (called Aster) will allow Teradata to offer a cheaper, “out of the box” solution. Sure, you can buy a solution from SAP (NYSE: SAP) or Oracle (Nasdaq: ORCL). But if you want to connect multiple vendors together, a third party can be more appealing.

Each of these companies has an established underlying business in a rapidly growing sector of technology.

They may not sound as sexy as a Tesla but, in my opinion, each will likely outperform the overall market in 2013, without the concerns of drawdown similar to Groupon (Nasdaq: GRPN).

Good Investing,

by ,

Source: http://www.investmentu.com/2013/January/the-top-tech-stocks-for-2013.html

http://www.investmentu.com

Copyright © 1999 - 2012 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014