Rande,
I have been contemplating the tech "summer sell off" that we always expect.
BLUF (Bottome line up front):I am beginning to think that this years summer sell off will not affect "as much" the high tech stocks that are profitable and have profitable futures supplying the products that will allow the world to communicate.
Here are some thoughts. Looking at last year's high fliers like aol, amzn, ebay, etc. There charts are terribly volatile to include the spring of 99. Now, each of these is of course an internet stock. EPS of .35, .36, and -1.19 currently.
Now let's look at today's high fliers like ADAP, JDSU, and BRCM. Thier future EPS for next year are .06, 1.08, and .95 respectively.
Market Caps of aol, amzn, and ebay are ($BIL) 139.9, 22.258, and 27.129. None of these stocks have doubled in the past 12 months.
Market Caps of ADAP, JDSU, and BRCM, ASSUMING A 100% GAIN, will be 6, 96, and 96.
The last few years internet was new and HOT, but this year communications is hot. I think that investors like companies that use new technology to produce "products" and enhance society. I believe that the strong EPS and growth rates will support those higher Market CAPs of the ADAPs, JDSUs, and BRCMs.
I feel that last year in the Spring began a major rotation of money from internet stocks to companies that will be profitting from the rewiring (and wireless) future of communication. (Remember all the industry consolidation last year.) Further, I do not feel that the rotation will be short lived (a few years at least.)
I know you are not arguing that the "Summer Sell Off" is the end of this communications era, but rather a blip on the radar screen.
Bottom Line: Which I will rewrite on the top to make it easier to follow.
I am beginning to think that this years summer sell off will not affect "as much" the high tech stocks that are profitable and have profitable futures supplying the products that will allow the world to communicate.
Maybe this is all wishful thinking, but I believe that JDSU, ADAP, LPTHA, BRCM, and a handful of others would be best off if not traded (but held!) by those of us with less experience - at least for the next year. Comments welcome!
Paullie
not spell/grammar checked. |
