Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ignore Corporate Earnings Noise to Find the Best Tech Stocks to Buy Now

Companies / Tech Stocks Jul 26, 2013 - 01:32 PM GMT

By: Money_Morning

Companies

David Zeiler writes: It's been a rocky, uneven earnings season for the tech sector. But if you know where to look amid all the noise and numbers, there are clues that can help you find the best tech stocks to buy now.

Until Apple Inc. (Nasdaq: AAPL) and Facebook Inc. (Nasdaq: FB) reported this week, tech stock investors had almost uniformly glum news from the biggest names in the sector.


Google Inc. (Nasdaq: GOOG), Microsoft Corp. (Nasdaq: MSFT), Intel Corp. (Nasdaq: INTC) and Yahoo! Inc. (Nasdaq: YHOO) all disappointed to some degree.

"The tech sector's relative performance versus the S&P 500 has been dismal for a long time and signaling that we're going to have a tough earnings season," Hugh Johnson, chairman and CIO of Hugh Johnson Advisors, told Breakout.

But investors need to avoid the knee-jerk reaction of interpreting a few earnings stumbles by some big names as a flashing red exit sign for tech.

While some big tech companies are indeed facing serious challenges, several are on the verge of major turnarounds.

"I see this as a transitional quarter," said Money Morning Defense & Technology Specialist Michael Robinson.

What's more, some positive data buried in several of these reports point very strongly to the next big growth areas for the sector, and by extension to the best tech stocks to buy now.

Which Titans Are Among the Best Stocks to Buy Now?

Earnings in any given quarter usually don't give a complete picture of what's going on with a given company and which direction it's headed. This quarter's batch of earnings was a prime example of that:

Microsoft: Like Intel, Microsoft got slammed this quarter for its inability to transition its business to the "mobile wave" of smartphones and tablets. Revenue was up, but missed estimates by almost 4%. And profits, at $0.59 a share, were woefully below the estimates of $0.75 a share. But the key news was the $900 million charge for its unsold pile of Surface tablets - evidence that CEO Steve Ballmer's latest mobile strategy has failed. "As long as Ballmer is the CEO, Microsoft will be a laggard," Robinson said.

Bottom line: MSFT is not a tech stock to buy now -- at least until Ballmer gets his long overdue pink slip.

Yahoo: While Yahoo's profits were up 46%, revenue was down 7%, an ongoing problem for the once Web pioneer. Worse, YHOO cut its full-year revenue guidance, giving investors more reason to worry. Given that the stock is up nearly 80% over the past 12 months under CEO Marissa Mayer, the question has become whether any more gains are possible.

"Yahoo needs to prove it can grow sales and integrate [recent acquisition] Tumblr in a way that grows profits," said Robinson.

Bottom line: Yahoo would not be a tech stock to buy now but for its stake in Alibaba which could pay off handsomely if and when that Chinese e-commerce company goes public.

Intel: Intel has struggled with the transition to the mobile wave for years, but this quarter really felt the pinch. Profits plunged 29% and revenue slipped 5%.

And yet as bad as it looks, Robinson likes Intel's prospects going forward. He noted that INTC recently struck a deal with Samsung to put its Atom chips in the Galaxy Tab 3, and is expanding in other areas such as wireless data centers With mobile chips making up just 1% of Intel's business, Robinson says Intel stock could more than double.

Bottom line: Intel is a tech stock to buy now.

Apple: Wall Street was thrilled that Apple beat expectations (its stock rose over 5% Wednesday), but in reality the results were less-than-stellar. Analysts were mostly pleased that iPhone sales were higher than expected, but Apple is still losing share in both phones and tablets to devices running Google's Android.

"I'm concerned that Android is eating into the market share of their core products, especially the iPad," said Robinson. While Apple is still making gobs of money, growth significant enough to move the stock higher will only come with at least one new breakthrough product.

Bottom line: AAPL is a tough call, but unless you have faith that a new game-changing product is imminent, it's not a tech stock to buy now.

Google: Wall Street overreacted to Google's decline in prices for ads at first, but then looked at the 20% increase in sales in its core business as well as a tidy 16% increase in profits.

But Google's earnings don't tell the story of its potential. Robinson likes how GOOG seized upon the mobile wave with its now-dominant Android operating system, and how it keeps expanding into exciting new areas of tech growth, from wearable computers like Google Glass to robotic cars to augmented human intelligence.

"This stock is poised to gain roughly 50% by the end of 2015, and that's on the heels of a two-year run of 70% gains," Robinson said.

Bottom Line: Google is a tech stock to buy now.

Facebook: The most reviled of the big tech stocks had by far the best earnings, blowing away expectations. Facebook's top line soared 53% largely on the strength of a surge in mobile ad revenue, sparking a jump in the Facebook stock price of nearly 30% in Thursday's trading.

Yet Money Morning Chief Investment Strategist, Keith Fitz-Gerald, a long-time critic of Facebook, retains his reservations. Fitz-Gerald pointed out that the gains in mobile looked impressive mainly because of an easy year-ago comparison, when FB had relatively little mobile ad revenue.

And given the competition for mobile ad revenue from the likes of Google and others, as well as the virtually non-existent barrier to entry for direct competitors, Fitz-Gerald stands by his belief that "Facebook has absolutely no place in the average investor's portfolio."

Bottom line: Facebook is definitely not a tech stock to buy now-and probably not ever.

How to Find the Up-and-Coming Best Tech Stocks to Buy Now

While Robinson clearly thinks several of the tech titans are among the best tech stocks to buy now, he says they are often not the best bellwethers for tech and especially not for the sectors of tech from which the most growth will come, like cloud computing and "Big Data."

Instead, Robinson recommends that investors keep an eye on a company like SanDisk Corp. (Nasdaq: SNDK), which makes solid state hard drives as well as the flash memory used in mobile devices.

"SanDisk gives us a look at three key sectors in one stock," Robinson said, noting that its products are used in mobile wave devices as well as servers used for cloud computing and Big Data.

Oh, and SanDisk's earnings quadrupled from the year-ago quarter. With plenty of growth in front of it, clearly SanDisk is also one of the best tech stocks to buy now.

Speaking of Big Data, Robinson has another tech stock that he watches closely to track that sector of tech. The high-powered equipment it makes helps other companies design aircraft and autos, model new drugs and run weather simulations.

Here's the company that Michael Robinson considers the top bellwether for Big Data

Source :http://moneymorning.com/2013/07/25/ignore-earnings-noise-to-find-the-best-tech-stocks-to-buy-now/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. 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 Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning 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 investent 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 after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 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