jordan 10 Still Room To Run
After a long career at Barron’s, I joined Forbes as San Francisco bureau chief in December 2010. I’ve been writing about technology and investing for more than 25 years. When I’m not working, you can find me riding my road bike jordan 10 around the Bay Area hills, managing my fantasy baseball team, rooting for my beloved Phillies and Eagles and hanging out in the Valley with my family.
ISI Group tech strategist Bill Whyman this morning advised clients to stay overweight technology shares.
“We have come pretty far in a short period of time,” Whyman said this morning in jordan 5 an interview with Forbes. But he adds that there are still three core reasons to remain bullish on the tech sector.
It starts with valuation. While not as supportive as before the recent rally, he contends that current prices are still supportive of further gains. He notes that the forward P/E for tech stocks is still at a 15% discount to the five year average.
Meanwhile, he notes earnings estimate revisions are just starting to shift from negative to positive. In short, the perception is growing that business is improving for many technology companies.
The third, and to Whyman the most important factor, is that tech fundamentals semiconductor orders, orders to the Taiwanese supply chain, tech durable goods orders and the like have stabilized, but still have yet to show signs of sustained improvement. The bull case is that we get that next.
Whyman notes that to believe in technology stocks you have to start with an upbeat view on the economy, and ISI chief economist Ed Hyman has been constructive on that score. Whyman notes that Hyman has pointed out that we have had 20 weeks in a row of improving economic data.
Tech looks cheap; semis, cheaper still. (Click to enlarge. is in better shape than Europe. He says that ISI expects a soft landing for the economy in China, a market he thinks is “key” to continued strength in consumer technology demand. “In China, the part of the pie they are trying to grow is consumption,” Whyman says, which should help boost demand for smartphones, PCs and other electronics gear.
For 2012, Whyman says, ISI expects the air jordan 12 consumer tech economy to be “a little less bad” than in 2011; for enterprise tech, he expects somewhat slower growth in 2012 than in 2011, due in part to the ongoing economic issues in Europe.
Whyman’s advice here is to remain overweight technology shares; in particular he advises overweighting semiconductor shares, and moving away from “mature tech” and towards “growth tech.”
Whyman advises investors to shift to quality growth names he points specifically to Apple, Google and Qualcomm rather than the less sustainabe “beta trade” for names that have had a big jump off the bottom, like Micron and Intersil.
I’d point out that in his research note this morning Whyman observes that many individual tech names still have very low forward P/Es Google at 14.1x, Apple at 11.4x and Hewlett Packard at 6.5x. On HP, he is careful to say that he wouldn’t expect a quick turnaround but ne adds that HP is “not a broken company,” and with a P/E of 6.5x forward earnings could be a rewarding pick for investors with a long time horizon.