Sometimes a good method of looking for stocks in a choppy market is to find stocks that are resilient to market pressures. These are stocks whose stock price holds up despite the market's turbulence. Here's a list of 19 tech stocks that fit that category.
Stock Screen
To find these 19 tech stocks, we choose the following stock screen characteristics.
Technology sector
Price Change over the past 13 weeks greater than 10% (to show strength through turmoil)
Operating Margin higher than 20% (to show solid financial stability)
Market capitalization greater than $100 million (weeds out small companies, whose stocks are volatile)
Ordinarily, these would not be very high hurdles. Last year at this time, several hundred stocks would have meet this criteria.
This year, only 19 stocks meet these criteria, as of June 16, 2000.
The Stocks
Here is a table of the 19(edited to 4) stocks in the list.
Stock Company Market Cap (MM) Price Change % Operating Margin %
ADI Analog Devices, Inc. 31,671 12.86 23.19
BBRC Burr-Brown Corporation 3,645 14.15 23.02
ELNT Elantec Semiconductor 1,150 86.90 22.26
LLTC Linear Technology Corp. 21,740 47.45 52.10
Source: Marketguide
What It Means
All this stock screen means is that the relative buying interest in these stocks is very strong, and has not been extinguished by market turmoil.
As an indicator, sustained buying power like this is a very positive vote of confidence, by the market, in the future of the company. It is frequently worth finding out why other people feel this way about the stock.
This type of approach to picking stocks is very similar to looking for stocks that set 52-week highs on market downturns. That particular technique is how Briefing.com first became aware of Metromedia Fiber Network, back in August 1998 at a price of about $7 per share (split adjusted). Metromedia Fiber Network has been one of the great performers over the past two years.
If you must buy new positions in tech stocks, and hold them as an investor through turbulent times, and your risk profile can handle it, looking for resilient stocks like these is often a good place to begin.
Note: this list is meant to be only a starting point for your research, not a final determination that a stock is appropriate for purchase at this time.
Comments may be emailed to the author, Robert V. Green, at rvgreen@briefing.com
Jim |
