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Tech Names That Can Save the Day


Some of the biggest tech fish in the pond are worth looking at here and now.


I was going to ask "Can Apple (AAPL) and Google (GOOG) save the Naz?" Instead I'll say that maybe IBM (IBM) can save the Naz, with AAPL and GOOG playing a strong supporting role.

So here are a few quick thoughts:

  • IBM: The company just looks solid with 20 cent beat. It's interesting that it chose to preannounce with its quarter so close.

  • AAPL: Short term, everyone is wondering when AAPL is going to make a run at $200. I'm wondering when I should get back in this name for a run to $240-265. I still think smaller mobile MAC's will be seen across the globe over the next couple years. Newer versions of iPhones, better set top boxes and continuing strength in the traditional Mac lineup will help the stock be a strong performer for at least another year or two. I had wanted to get back into the name under $160, but I'm not sure I'll be able to get in that cheaply.

  • Synchronoss (SNCR): It could make a run off bullish AAPL news from Macworld. The stock got hit hard like many tech names over the past week or two and is in the direct AAPL food chain.

  • GOOG: I'm back to being bullish on GOOG. With its reporting period coming soon and many catalysts in the works I think the share around $650 have pretty good value for my predicted run to something just short of the area around $1,000. Here again, I have been eyeing the $625 print and really lower than that for re-entry but I may have to adjust my view slightly higher.

Many stocks in tech have gotten hit far, far harder than the three mentioned above. Over the next two weeks or more we will be able to see how the leaders trade as well as many laggards. I feel we may enter a market again where you can buy the dips and sell the rips.

What are many of the beaten down tech stocks worth if the housing recession and possible consumer recession can skirt many of these names? What are they worth if we never "officially" print a recession?

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Many thought the broad economy was in recession in the 1997-98 time frame and we had to face currency crises, the LTC issues and suffer a nasty market correction with tech getting hit the hardest. Tech ended up being the best performing sector while many parts of the economy did have a muted two-year run.

Also in the 1993-94 time frame tech was weak and traded poorly. Again, recessionary conditions existed in many sectors, with tech valuations getting extremely cheap. I would view the current environment is more similar to this period than the 1997-98, but similarities exist from both.

Semis (the SOX) are now lower than any time in recent years except the 2002 lows, while valuations on EPS, revenues and many other metrics are even cheaper than 2002: There is tremendous value in many semis.

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No positions in stocks mentioned.

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