Posts Tagged ‘technology stocks’
How Extraordinary Growth in Bakken Oil Is Revitalizing Railroads
By Mitchell Clark, B.Comm. for Profit Confidential
Change in the railroad business is not something you expect, but it is happening with Bakken oil.
The Association of American Railroads (AAR) is the industry group for North American railroad stocks, and while all trade groups are to be taken with a grain of salt, you can garner insight on the U.S. economy by reading the AAR’s data.
Even if you aren’t interested in railroad stocks, business conditions for railroads are still very relevant. They remain the backbone of North America and the industrial economy.
According to the AAR, U.S. Class I railroad stocks originated a record 97,135 carloads of crude oil in the first quarter of 2013. This represents a gain of 20% from 81,122 carloads in the fourth quarter of 2012 and a substantial increase of 166% from 36,544 carloads originated in the first quarter of 2012.
While the shipment of oil—Bakken oil, in particular—is the source of renewed growth for railroad stocks, the numbers also reveal a flatness that coincides with the rest of the U.S. economy.
The AAR reported that in the first 21 weeks of 2013, U.S. railroad stocks reported volume of 5.8 million total carloads, down 1.8% from the comparable period in 2012. Total U.S. traffic for the first 21 weeks of 2013 was 10.8 million carloads and intermodal units, up 0.8% comparatively.
For the same period, Canadian railroads reported volume of 1.6 million carloads, up 2.3% comparatively, and 1.1 million intermodal units, up 4.7%.
Volume on Mexican railroads came in at 315,377 carloads, up nine percent, with 192,060 intermodal units, down 0.3% from last year.
Railroad stocks have been on a … Read More
Technology Stalling, but for How Long?
By George Leong, B.Comm. for Profit Confidential
Technology stocks underperformed the S&P 500 and Dow in the first quarter of the year, but that’s no big deal, as I continue to see technology as a market leader.
The month of April saw some buying return to technology stocks, with the NASDAQ managing to outperform the S&P 500—that’s a start.
While we have seen momentum dissipate from technology stocks and Apple Inc. (NASDAQ/AAPL) lose some of its shine, I remain bullish toward technology stocks.
The chart of the Technology Select Sector SPDR (NYSEArca/XLK) below shows the current sideways trading channel for this index and the current test at the upper resistance line, as indicated by the top blue line.
If my technical analysis is correct, I expect technology stocks to take a run at the resistance.
Chart courtesy of www.StockCharts.com
According to FactSet, earnings growth for the information technology (IT) sector is estimated at 0.2% in the first-quarter earnings season—if Apple is excluded. FactSet is optimistic the sector will rally in the second half of this year, with an estimated growth rate of 12.0% in the third quarter and 11.2% in the fourth quarter. (Source: “Earnings Insight,” FactSet, April 19, 2013.)
Of course, if Apple rebounds, the growth rate will likely rise.
If we exclude Apple, FactSet estimates the IT sector will grow at 10.0% and 12.4%, respectively, for the third and fourth quarters. These are pretty darn good numbers.
My top areas for growth going forward include the mobile, Internet, communications, networking, IT, and cloud computing sectors.
I suggest adding both small and large companies across different businesses, which will add diversity, making your tech holdings … Read More
Facebook the Next Big Winner?
By George Leong, B.Comm. for Profit Confidential
Google Inc. (NASDAQ/GOOG) traded above $800.00 on February 19, and I still can’t believe I missed out on an early investment opportunity when the stock first debuted at $100.00 in August 2004. The company has become the king of the Internet space and the favorite of retail and institutional investors in the equities market. In fact, Google now appears to be the new Apple Inc. (NASDAQ/AAPL), which has disappointed investors and is sliding downward on the chart. (Read “Mr. Cook Better Have a ‘Plan B’ for Apple.”)
The comparative stock movement of Google versus Apple in the equities market is obvious on their stock charts. While Apple has continued to slide lower since trading at over $700.00 in September 2012, Google has moved in the opposite direction, with its recent breakout above $800.00, based on my technical analysis.
Chart courtesy of www.StockCharts.com
Going back to September 2012, Wall Street was so hyped up on Apple in the equities market that several analysts started to assign a $1,000 price target to the company, suggesting Apple would be the first $1.0-trillion company in the history of the equities market. Of course, it didn’t quite pan out that way.
On the other hand, just as we had seen with Apple in September, we are now seeing euphoric analysts jumping all over Google, highlighted by a $1,000 price target from Bernstein Research.
While I’m not convinced Google can reach this magical peak within a year, I do feel the stock will inevitably trade at $1,000, unless the company decides to split the stock. But then again, co-founders Lawrence Page and Sergey Brin … Read More
So Many Technology Stocks, but Just One to Own for the Next Five Years
By Mitchell Clark, B.Comm. for Profit Confidential
Technology stocks are not for the faint of heart. The business cycle exists, and companies have to continually re-invent themselves or get left in the dust, especially among technology stocks, where consumers will pay almost anything for innovation. The smartphone industry is the perfect example. BlackBerry (NASDAQ/BBRY;TSX/RIM), formerly Research In Motion Limited, dropped the ball on what was an outstanding leading position in the smartphone revolution. How about personal computers (PCs)? Dell Inc. (NASDAQ/DELL) is now a partial contributor to its own operational weakness because of the extreme commoditization of the PC that it helped foster. But Dell’s been struggling on the stock market for the last five years.
Among technology stocks, I’d steer clear of the retail landscape, because the competition is intense; due to the unpredictability of innovation, the corporate advantage changes too quickly. If I was to build a position in only one technology company for an investment lasting greater than three years, I’d choose Oracle Corporation (NASDAQ/ORCL) on any major price weakness.
I like Oracle because of the business that it’s in—selling database and cloud software and hardware to well-heeled corporate and government clients that pay their bills on time. Unlike many technology stocks, Oracle isn’t expensively priced on the stock market, and it pays a small dividend. Finally, I like Oracle because of its excellent long-term track record on the stock market. In my view, an investor is doing well if he or she can double their money every six years or so. Oracle comes close to fitting that bill. The company’s long-term stock chart is below:
Chart courtesy of www.StockCharts.com
Like many technology stocks, … Read More
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