Bar Lowered for Biggest Tech Names
Former high-flyers scale back expectations.
The Intel announcement hurt the market yesterday morning, but it was taken better than most of the other dire economic news. And lest we forget, Intel has gone from $30 to $14 over the last year while producing record profits, a P/E that's come down to 11, and a dividend yield of 4.1%. Yes, that's Intel's divided yield (twice a 2-year Treasury), though you rarely hear an analyst talk about something like that while they downgrade the name at lows. Net, Intel was priced for more bad news.
I suspect the same of Nokia. However, I've been severely critical of the ECB - and still am, as they are still 3 curves behind the curve. This could plague Nokia longer than some other tech shops, though they have a strong global distribution network. And given that Nokia's dividend yield is 6.8%, maybe they'll mark a durable low today or very soon.
As I said around the October lows, I would be very willing to call "ultimate lows" here if we had an uptick rule - and these lows may hold, though I hate seeing the market go through a new retest nearly every 3 weeks.
It's noteworthy that the NASDAQ has broken old lows. Earlier this week, I buzzed that Google (GOOG) would trade between $285-295 and that that was a necessary evil. Apple (AAPL) did hit my $85s, as well. So these are 2 more ingredients for making durable lows.
Late Wednesday, I buzzed that I added more Ultra QQQ ProShares (QLD) and, as tempting as it was yesterday to dump them into the ramp, I didn't. My plan was to keep them into the mid- to high $30s, and then write calls against the position. So, unless we get another 100 points on the Naz in a day or 2, I'll stick with the trading plan.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter