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Follow on Google News | Why Tech Stocks Are Where You Should BeWhy technology stocks are where investors should be right now.
By: George Leong Strong earnings from technology have provided the catalyst for the buying, helping to offset the significant debt issues in Europe and the U.S. As was the case in the first quarter, there are some high hopes of seeing revenue growth in addition to earnings acceleration as the economy recovers. Whether they are penny stocks, micro-cap stocks, or blue-chip stocks, you want to see growth. In my view, the key in the second quarter and beyond will continue to be the ability of companies to report higher revenues, which is what you want to see during an economic recovery, as it indicates increased spending. The reality is that earnings can be made to look better via cost cuts and control. In addition, watch for guidance going forward, as this will also be a key factor. Two key sectors will be technology and banking. Traders are looking for leadership from these groups. The NASDAQ has been stronger and I continue to believe that the technology area will be a critical area, since this sector has provided much of the leadership over the last several years. Big-name technology continues to look positive. We saw an impressive blow-out quarter from Intel Corporation (NASDAQ/INTC) Technology companies also delivering better-than- The area to watch for in technology will be mobility applications for tablets and smart phones, as users shift away from the more cumbersome PCs and laptops. Apple Inc. (NASDAQ/AAPL) Research In Motion Limited (NASDAQ/RIMM) In banking, Bank of America Corporation (NYSE/BAC) was short on adjusted EPS and reported a 54% year-over-year decline in second-quarter revenues. The results are disappointing, especially after good results from Wells Fargo & Company (NYSE/WFC), JP Morgan Chase & Co. (NYSE/JPM) and Citigroup, Inc. (NYSE/C). The problem with BAC appears to be more bank-specific and due to massive litigation charges. These are just some of the companies and areas to watch for during this second-quarter earnings season. As I have said, the key will be revenues, especially organic growth. We want to see revenues grow to drive earnings instead of cost cuts. Without revenues growing, it is difficult to imagine a healthy economy and this is my concern that could hamper growth. Retire on This One Hot Stock! This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today. Get your FREE report on our top stock pick immediately here. http://www.profitconfidential.com/ # # # We publish Profit Confidential daily for our customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! Visit our site: http://www.profitconfidential.com/ End
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