Hi Di,
· Earnings: The earnings outlook for the S&P universe of technology stocks remains positive.
Bottom-up forecasts show that the unweighted average earnings of the large-cap technology
stocks are expected to grow by 34% in 2001, following an expected gain of 54% this year.
Mid-cap and small-cap companies (with earnings) are expected to show gains of 43% and
40%, respectively, next year, following expected increases of 39% and 23%, respectively,
this year.
This indicates that the growth rate is decreasing.
Wouldn't that pose a threat?
· High-Tech Finance: IPO and M&A activity in the technology and telecommunications
sectors at near record highs over the past 12 months. Share buybacks completed sank to a
secular low. Companies with no current earnings that are running out of cash led the recent
plunge in the tech sector. The rebound was led by big-cap tech. The IPO market is likely to
become more selective, but it should continue to finance quality startups (Exhibits 10 and
11).
There is talk about a possible banking crisis due to the failure of many of these IPO's.
I notice when I focus on a lot of this negative news, a bottom is usually near.
However, I just don't remember things looking as grim as last year...
-Clappy |
