The lack of consensus over what the market wants to do has resulted in a trading range for the past ...
Must-have Tech Trio
02/03/2016 8:00 am EST
For those afraid of the stock market, here are three must-have tech companies poised for some really terrific volatility-induced gains when the dust settles, asserts Keith Fitz-Gerald, editor of Total Wealth.
We’ve talked about them a lot in recent months, but that doesn’t change the fact that they’re all compelling choices at the moment because the volatility that spooks less-savvy investors has put them on sale in concert with a broader sell-off that continues even this morning as I write this.
Netflix has been on a tear since late 2012, returning more than 1,200%. Many people think that can’t continue, but I’m not one of ’em.
The company just crushed earnings expectations, posting $0.10 per share versus analyst expectations of $0.02 per share. Revenue was reported at $1.82 billion versus only $1.48 a year ago and $1.83 expected.
Nearly 80% of the company’s new customers last quarter came from outside America. As the company continues to grow internationally, consistent double-digit revenue growth seems like the most likely scenario.
I’m especially excited by plans for Russia and China that suggest plenty of explosive growth ahead, even as the US markets become saturated. I don’t think $200 a share is out of line in the near future.
I avoided Facebook for a long time because I didn’t have the sense that Mark Zuckerberg knew what he wanted it to be when it grew up. But that’s changed in recent months.
Through a series of savvy acquisitions ranging from the $19 billion acquisition of WhatsApp to the $2 billion purchase of the virtual reality company Oculus, Facebook is laying claim to a virtual future that most people don’t see coming, let alone understand.
What’s more, with $15.8 billion in cash reported during its last quarter, the company has the resources to make it happen.
The virtual reality sector alone is forecast to soar to $30 billion by 2020 and DigiCapital forecasts that augmented/virtual reality technologies could total $150 billion by that time frame.
If these projections are even halfway correct, Facebook is entering a fabulous new era and the time to get in is now…when volatility has handed you the opening. A price tag of $150—12 to 24 months from now—doesn’t seem like a stretch.
Unlike other tech stalwarts, Google—now known as Alphabet—hasn’t stalled.
Google grew its cloud presence by 101% from 2014-2015 by spending a $10.9 billion sum on cloud infrastructure…hefty, you might say.
But the juice is worth the squeeze, with the public cloud market expected to swell to $112 billion 2018.
Combine that with Google’s other ambitious ventures in VR technology and The Internet of Things and this is very much a company of the future. No, strike that…a series of companies of the future. Plural.
I believe the move to Alphabet is simply the first move in a long line of strategic moves that will see management unlock as many as ten individual breakthrough companies now operating within it.
Shares are still very expensive, so this may be one of those companies that you edge into or buy a few shares at a time and tuck away for years to come.
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