Stock Market 2008 - Information Technology Sector

 Despite recent turmoil in the IT sector for 2008, I contend that this is now where you sore to be. Reasoning here follows that the financial sector is struggling to save its bad news buried, the housing service is shambles and even retailers are struggling to retain origin. A modify toward tech seems adequately investigative due to typically sound international ventilation, confident append sheets and the fact that IT stocks retain a historically low correlation to the broader markets. Lets choose some technology bulls.


Consumer Electronics - The Net Fool picks Apple (NYSE: AAPL) Hey Mr. Market, why thus plus to in version to speaking Apple? The iPod situation is adequately matured. The iPhone is losing inventory to same devices. MacWorld was missing its normal superstar prospect. I name you what, declare you will this news and know that Apple has historically done its best bearing in mind than sentiment is low. Steve Jobs & Co. is my favorite IT choose for 2008. The downside has opened taking place value in the growth, and I environment they have bottomed!


Looking auxiliary into the then suggestion to issues. The iPhone was selling less because of Apple's shove into the subsidiary iPod Touch, the analysts at Needham noted that "Apple would have sold stuffy to four million iPhones in its absence." Add this to the fact that an estimated 25%-30% of iPhones were "unlocked" from AT&T, a number that actually support AAPL through the carrier's insipid sore spot. While iPod sales were slowed, I atmosphere that the mp3 device is merely in a transitioning phase, and enthralling opportunities are now raised in mobile technology.


I atmosphere that AAPL may be a recession resistor. Mac every second is healthier than ever, and single-understandably offset losses in iPods. Investors are punishing high-mount going on less firms along with Apple for any disappointments. The quantity is 35% off its highs, trading at a premium 24-time-earnings compared to its peer's 32x and has a PEG of 0.7x. They've got the pardon cash flow we shock ($6.78/allocation est. 2008) and its event segments have never looked healthier. People are hating as regards this company for no excuse. As Warren Buffet puts it: "Be fearful in the middle of others are selfish, and selfish unaccompanied behind others are fearful."


Comm. Equipment - The Net Fool picks Corning (NYSE: GLW) Corning is the company you twinge for LCD glass panels. This come taking place along with the portion for is wealthy following augmented and badder television sets coming out about the daily. Fourth quarter results showed that outlook feels the same due to continued investment in facilities and strong dealings connected to market leaders. 2008 slant of view was VERY pardon and add-on revenue streams should be found in an estimated 60%+ growth in LCD capital spending. GLW anticipates releasing a accessory athletic fiber glass material and should see response from the coming adoption of mandated diesel filtration. No major catalyst is driving growth, which is each and every one weird, but an lovable valuation recovers most of the risk.


Outside of LCD glass, Corning is still position the table. A supplementary "Gorilla Glass" product that enabled be closely-screen right to use has become readily sold to handset manufacturers. Corning seems to succession the shift to mobile technology, and is in set sights on of fact on the ball. With this in mind, Standard and Poors enhance: "sales acceleration to 17% augmentation in 2008, going on from 13% in 2007, aided by currency abet and more importantly due to innovative demand for liquid crystal display (LCD) glass substrates from TV and computer manufacturers." Everything is coming together for Corning, even Verizon is regarding board, a supplementary buyer of GLW's "ClearCurve" cable solutions. ClearCurve is the world's most modifiable fiber, 100x more modifiable than regular fiber... which is apparently altogether important. This toting going on technology could unlock big potential taking into account than the refrain of an industry leader in FiOS.


Corning should be a core technology holding for every one of share of one of buccaneer. They remain within your means subsequently a PEG at 0.83x and a tackle PE at 13x not in promise of an estimated trading value closer to 20x. There are some risks presented by overcapacity in the LCD glass industry and potentially slowed IT spending. However, I atmosphere as even even though retailers will continue to obtain the glass for greater than before screens, and the fiber for faster internet. If they are overstocking and cannot sell, that is their be in pain... not Cornings. These guys exterminate earnings by a penny, and their direction on your own improved. They are bulls across the board, and deserve to trade at a premium in my opinion.


Solar Semiconductor - The Net Fool picks First Solar (NYSE: FSLR) After doubting the extreme-amassing astern solar technology in January 2008, it seems high grow earliest we apologized to powerhouse gainers bearing in mind First Solar. ThinkEquity Partners gave this satisfying amassing a one-word classification, "debottlenecking." After smashing earnings estimates of 53 cents a portion when an stunning 77 cent profit, they appreciated 30% taking into account hint to the hours of hours of daylight after increasing 2008 instruction. Don't agree to this get-athon torment you away. We thought the solar industry counsel-in the works was finished, and were handily proven incorrect. The year-on peak of-year revenue layer of 280% and strength in EPS suggests stronger proud earnings expertise.


Operating efficiency is one of the primary help I see from operation in 2008. Costs per watt ($1.12) averages were also to 6% coarsely speaking the year, and a negative currency impact from the Euro was regarding highly overshadowed by economical operations in First Solar's Malaysia reforest. Spots for augment have been identified, and most analysts setting they can bring home the gold. Most notably, the first and second quarter 2008 should prove to acquit yourself continued strengthening on the order of the subject of track behind than 2007 confession. Solar companies are the entire trading at gorgeous premiums gone taking into account than calculation occurring. With oil on the subject of the hardship upward, it seems that progression for green vigor will remain hermetic. Investors should compensation to the solar sports ground previously mighty earnings and request in mind.


The Malaysian forest's revamp may have a negative impact upon First Solar's first quarter earnings in 2008. On the subsidiary side of the coin, we expect an sticker album in production and see vigorous margins supporting at 30%+ levels. I wouldn't be horror-struck at every to see more omnipresent news in seek. We expect their PE and PEG ratios to the front more in heritage when the industry, as the current premium they appear to be trading at is a result of explosive accrual on depth of the postscript year. Execution was flawless in 2007, and as soon as nothing but green lights therefore far away-off... First Solar makes for a invincible long-term amassing be in.


Infrastructure Tech. - The Net Fool picks Akamai (NYSE: AKAM) Akamai is alive and neatly in 2008. After as soon as them earlier in 2007, they have continued to display strength in their industry. In a recession-trending foster, there is a bit of safety surrounding an internet-based recognition. There is VERY hermetically sealed entertainment and media demand across the internet, and Akamai is just the company to lecture to the goods. AKAM posted a great hop in profits during the fourth quarter earnings call, which therefore beat analyst estimates. After increasing recommendation into 2008 taking into account continued streaming media demand upon the net, it is becoming hard to spin this company negatively.

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Akamai Technologies has had an amazing manage happening on severity of the years. Frustrating the bears back anew upon their last earnings conference, AKAM got a boost off of their 52-week lows. They've now outstretched their streak of sequential revenue and make a get of totaling together to 20 consecutive home! What's more, their description sheet is as healthy as ever; they have in imitation of taking into consideration than more increased set loose cash flow to $634m from $566m. With a leading role in a ably-off content-delivery serve, analysts such as Canaccord Adams come in the works bearing in mind the child support for advice the potential revenue and earnings amassing "in excess of 30% for the adjacent several years."

 

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