Investors have been extremely averse to buying back into the tech sector after getting burned in the wake of the technology bubble bursting back in 2000-2002. Although prices have rebounded since then, shares in this sector have, in aggregate, failed to generate excitement. With the exception of crowd-pleasers such as Google (GOOG) and Apple (AAPL), technology shares have essentially “missed” this cycle and have performed roughly in line with the broad market. However, the stars are beginning to re-align and technology shares may benefit from key emerging secular trends that will likely change the business landscape in the years to come. Indeed, several big name technology companies such as IBM (IBM), Texas Instruments (TXN), Hewlett-Packard (HPQ), Oracle (ORCL), and Cisco (CSCO) are on our “Strong buy” list, and are well-positioned to beat the market over a 3-12 month time horizon.
Posts Tagged ‘IBM’
Technology: The Way of the Future
Wednesday, September 16th, 2009
10 Dangerous Stocks
Thursday, April 2nd, 2009Companies with high leverage ratios stand to make good profits in booming economic times, as they can afford to maximize their output to meet budding demand. However, they are more vulnerable during recessions when sales typically slow and can be insufficient to cover interest expenses. During periods of slow or negative revenue growth, massive interest expenses can also lead to volatile earnings results from one quarter to the next, making the stock less popular among investors.
The chart below highlights 4 of the 10 companies we’ve chosen to highlight whose long-term debt/equity ratios have climbed substantially in the last year and are high relative to their historical average.
IBM (NYSE : IBM) = SELL
Tuesday, March 3rd, 2009Last week IBM reiterated their earnings outlook at the Goldman Sachs tech conference. This was a welcome surprise to investors, as they have grown accustomed to companies downgrading earnings in recent months.
