Slider (OT) Briefing Com's report on tech stocks tonight for your edification.. Note bounce off of technical support level today on NASDAQ at 1350. There are so many bargains in blue chip tech stocks it's hard to believe. I bought into PAIR,TER, INVX, and SCI today- all quality companies laden with cash and either down near book value or P/S ratios below 1.0.
Yup they may go lower in a bear market- but not much lower....
Finally if you want a risky, but quality flip chip maker look at AFLX. If it makes it through the lean times and does not crash and burn, then it could return 700%+ over the next two years if it only goes back to 50% of its 1998 high....
General Commentary
In yesterday's commentary we noted that the Nasdaq's close below 1477 put the index on a near-term path to 1350... Didn't really expect that floor to be tested Thursday, but early sell-off brought composite down to an intra-day low of 1357... Index rebounded nicely off this floor in late trading... We expect tech laden index to continue higher over near-term, as value investors begin to do some light buying... Decent earnings numbers and increased likelihood that Fed will step up and cut rates again (as early as next week), should give psychology much needed boost... I know it's tough to pull the trigger when the prevailing sentiment is so bearish, but investors with long-term view should be prepared to take advantage of fire sale prices... In the industry briefs below we will profile a number of stocks Briefing sees as deeply discounted based on long-term growth prospects.
•After the close, PairGain (PAIR) reported a gain of $0.16, in line with First Call estimate and one penny below Zack's consensus forecast... Year-ago company earned $0.16, as well... Revenues rose to a record $76 mln (+8.1 y/y)... Tough to figure out how market will react, especially after Advanced Micro (AMD) and Yahoo! (YHOO) fell sharply after handily beating estimates... On a long-term basis, Briefing contends that this stock is dirt cheap.
Industry Briefs
Computer Systems & Peripherals | Networking | Software | Semiconductor | Chip Equipment | Telecom Equipment
Computer Systems & Peripherals
•Group continued to come under pressure amid concern that global financial crisis will erode consumer confidence and result in weaker than expected holiday PC sales... Market also worried that reduced capital spending budgets will hurt corporate sales... For the large multinationals, softer sales picture partially offset by dramatic dollar declines.
•Dell (DELL) bounced off support in the 42-40 area to close at 48 7/16 (-2 1/8)... Company has been pulled lower along with rest of techs despite rosy outlook painted by management... Stock's history of snapping back from moderate corrections suggests that DELL will be one of the stocks leading the recovery.
•Bargain basement candidates include: Sequent (SQNT), Adaptec (ADPT), Seagate (SEG), Quantum (QNTM), SCI Systems (SCI).
Computer Networking
•Cisco (CSCO) broke record losing streak, snapping back to close up 2 13/16 at 46 11/16... Deeply oversold technical tone and solid long-term fundamental prospects suggest stock will extend its gains today... Key resistance near 52 (200-day moving average)... Ascend (ASND) went along for the ride on light bargain hunting... Stock added 1 3/8 to 38 1/8.
•Bargain stocks: 3Com (COMS), Cabletron Systems (CS), Fore Systems (FORE), Xylan (XYLN), Shiva (SHVA) and Newbridge Networks (NN).
Computer Software & Services
•Briefing lowered group's short-term rating... For details see Sector Ratings.
•Net stocks continued to take a beating, with search engines posting some of the biggest declines... Fears of increased competition... Yahoo! (YHOO) tumbled over 9 points despite posting much better than expected earnings on just such fears... Support at 100 held, however, suggesting stock will rebound smartly as soon as market tone improves.
•Bargains: Keane (KEA), Computer Associates (CA), Parametric (PMTC), Symantec (SYMC), Netscape (NSCP), JDA Software (JDAS), Platinum Tech (PLAT) and Oracle (ORCL).
Semiconductor
•Dallas Semiconductor (DS) reported gain of $0.45, two cents below estimate and 12 cents below year-ago results.
•Had to be impressed by group's relative strength in face of tough market conditions yesterday... Whereas Nasdaq tumbled more than 40 points, SOX index shed just over one... As we have noted on several occasions over past couple weeks, news out of this sector has been generally positive... Turnaround just around the corner.
•Bargains: Intel (INTC), National Semi (NSM), LSI Logic (LSI), Advanced Micro (AMD), Analog Devices (ADI) and VLSI Tech (VLSI)
Semiconductor Equipment
•Like chip sector, group held up relatively well... Again, this industry has already suffered through a very painful bear move so shouldn't be surprised by improved relative strength - it had only one way to go... Still too early to jump back in aggressively, but won't be long before group puts it back into gear.
•Bargains: Applied Materials (AMAT), KLA-Tencor (KLAC), Teradyne (TER), Etec Systems (ETEC), Lam Research (LRCX) and Kulicke & Soffa (KLIC).
Telecommunications Equipment
•PairGain (PAIR) reported as expected results, see general commentary for more details... For insight into how stock will trade off open today, see Short Stories.
•Lucent (LU) snapped losing streak, rebounding by 2 1/4 to end session at 59 1/4... Still a fry cry from all-time high... Major resistance at 70.
•Bargains: Advanced Fibre (AFCI), Andrew (ANDW), Scientific-Atlanta (SFA), Ciena (CIEN), Tellabs (TLAB), Nortel (NT) and PairGain (PAIR) |
