After culling through the research of some 70 different experts, MoneyShow.com senior markets editor Jim Jubak came back to Breakout with a best of the tech sector trio of investing ideas.
Atop this list, Jubak says, is Qualcomm (QCOM), a stock favored by Ingrid Hendershot of Hendershot Investment.
“She’s a Buffett, Graham-Dodd value investor, which is a strange thing for technology,” Jubak says in the attached video, “except that Qualcomm is a very unusual technology company.”
As he explains, a large part of this chip-maker’s revenue is derived from royalties on its many patents, a fact that he says affords Qualcomm “really, really high margins” as well as leverage against the ongoing erosion of chip prices. He also touts their large and growing share of the next wave of the wireless market as a catalyst for future upside.
To be fair, shares of Qualcomm have badly lagged the Nasdaq 100 (^NDX) over the past year but are still currently “buy rated” by three-quarters of the analysts who follow the company.
For more on this pick check out MoneyShow.com here.
Jubak’s second pick is also a semiconductor play, but Marvell Tech (MRVL) is a segment leader, having gained 65% in the past 12 months. One of the reasons why this Bermuda-based business is highlighted on MoneyShow by Paul McWilliams, editor of Next Inning, is because the stock has “been damaged a little bit” having slumped to a four year low a year ago.
“You’re looking at a company with big exposure in wireless mobile, storage and networking,” Jubak says, “so they cover all of thaut waterfront.”
Because the stock has come so far so fast, about 60% of analysts currently rate it a buy.
More on MoneyShow's takes can be found here.
MoneyShow.com's final pick in the sector is Apple (AAPL), the giant device maker that is coming off of its worst year since 2008, having gained just 5%.
“The P/E on this is really low. It’s like 12.3 times forward earnings Jubak says of a pick by Jim Pearce, the research director at Investing Daily. “I really like the 5S (iPhone) not because of what it does, but because of what it suggests we are driving at in the future." Specifically, he mentions the number of new sensors and gadgets it carries, including fingerprint scanning log-ins and more powerful 64-bit chips as well.
Granted, with a market value of $490 billion, it takes a lot to move this massive business which is set to report its latest results on Monday January 27th after the close. Consensus estimates are for Apple to earn $14.08 per share on about $57 billion in sales.
For MoneyShow.com's take on Apple click here.