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Tech Stocks Set to Push the Envelope
01/22/2014 2:00 pm EST
In the supersonic-paced technology sector, a company's ability to adapt and innovate is crucial for survival. However, MoneyShow's Jim Jubak is looking at three tech companies that are set to not just survive, but to thrive.
In the video below from Yahoo! Finance, Jim Jubak highlights a few technology companies that are the 2014 Top Stock Picks of several of MoneyShow's team of experts. These tech companies aim to adapt, innovate, and overcome any obstacles along the way.
For his first expert's pick, Jubak turns to Ingrid Hendershot, editor of Hendershot Investments, who chose Qualcomm (QCOM) as her 2014 Top Stock Pick. Qualcomm is the world leader in 3G, 4G, and next-generation wireless technologies.
As Hendershot points out, “Qualcomm reported record revenue for fiscal year 2013 of $24.9 billion, an increase of 30% over the prior year.” However, Jim Jubak is even more intrigued by the fact that the majority of this chip-maker's revenue comes from royalties on the many patents it owns, a factor that affords Qualcomm, as Jubak puts it, “really, really high margins,” plus leverage against the continuous erosion of chip prices.
However, in all fairness, shares of Qualcomm have indeed lagged the Nasdaq 100 (NDX) over the past year. But despite that fact, Qualcomm is still currently rated a buy by a large percentage of analysts who continue to follow the stock. As Hendershot points out, perhaps that is because “Qualcomm believes the company can generate double-digit compound average growth for revenues and earnings for, at least, the next five years.”
Marvell did suffer a setback by way of a law suit with Carnegie Mellon University, however, despite that, or rather, possibly as a result, both McWilliams and Jubak feel this semiconductor company is poised to bounce back much higher. It seems to have even started its comeback, having already gained 65% in just one year. As Jubak states, “You're looking at a company with big exposure in wireless mobile, storage and networking,” adding “they cover all of that waterfront.”
For his final tech sector choice, Jubak likes what Jim Pearce and Leo Boeckl, editors of Smart Tech Investor have to say about the tech giant Apple (AAPL) , which is one of their 2014 Top Stock Picks.
According to Pearce and Boeckl, “too many tech stocks are currently priced for perfection and therefore susceptible to quick and severe correction at the first whiff of bad news. For that reason, they chose this giant instead, which is coming off of its worst year since 2008, having gained just 5%.
However, as Jim Jubak points out, “The P/E on this is really low. It's like 12.3 times forward earnings,” adding “I really like the 5S (iPhone) not because of what it does, but because of what it suggests we are driving at in the future." Specifically, Jubak notes the number of new sensors and gadgets Apple carries, including fingerprint technology and more powerful 64-bit chips.
Granted, with a market value of $490 billion, it takes a lot to move this massive conglomerate, but that is even more reason for why Pearce and Boeckl chose this as their conservative pick for the year. Apple is set to report its latest results on next Monday, January 27, after the close. Consensus estimates are for Apple to earn $14.08 per share on about $57 billion in sales.
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