Posts filed under “Valuation”

Goldman Sachs: Sell Tech Selectively

Yeoman’s work by Barron’s Eric Savitz, who pens the must read techblog Tech Trader Daily, in assembling a laundry list of stocks downgraded by GS (published Friday after the bell).

The money quote from Goldman analysts states they have become "incrementally more cautious on tech fundamentals given the current macroeconomic backdrop."  

Additionally, "with software a typically back-end loaded sale, if
there is any concern on budgets in the early part of 2008, we would
expect CIOs to hold off their purchases until later in the year."

The main area of concern: "Companies with large enterprise exposure and significant dependence on the U.S. consumer."

Ouch.

I have long advocated deciding on an exit strategy prior to owning a
stock. While these downgrades may not mean immediately selling them, at
the very least you should be revisiting your pre-planned exits. If you
are unsure about selling, your trailing stop losses should give you
some protection in the event of a selloff. If you are not using
trailing stops, then you may want to tighten up your existing stops –
especially on those names that have enjoyed a good run.

What follows is a list of stocks affected by estimate cuts and/or price target changes by sector.

Semis/Chip stocks:

Advanced Micro Devices (AMD)
ATMI
Broadcom (BRCM)
Entegris (ENTG)
FormFactor (FORM)
International Rectifier (IRF)
Intel (INTC)
Intersil (ISIL)
Microchip (MCHP)
Micrel (MCRL)
Marvell MRVL)
Micron (MU)
Maxim (MXIM)
National Semi (NSM)
Nvidia (NVDA)
Teradyne (TER)
Texas Instruments (TXN)
Volterra (VLTR)

Hardware:

Dell
Directed Electronics (DEIX)
EMC
Emulex (ELX)
IBM
Intevac (IVAC)
Isilon (ISLN)
Lexmark (LXK)
Network Appliance (NTAP)
Sun Microsystems (Java)
Brocade (BRCD)

Goldman previously made similar moves this week in Software:

Adobe (ADBE)
Autodesk (ADSK)
BEA (BEAS)   
BMC
Computer Associates (CA)
Check Point (CHKP)
Citrix (CTRX)
Cognos (CGNS)
CommVault  (CVLT)
Informatica (INFA)
Macrovision (MVSN)
McAfee (MFE)
Oracle (ORCL)
Quest Software (QSFT)
Red Hat (RHAT)
RightNow (RNOW)
SAP
Secure Computing (SCUR)
Symantec (SYMC)
Tibco (TIBX)

Communications:

Netgear (NTGR)
Corning (GLW)
Cisco (CSCO)
Nortel NT)
Aruba (ARUN)
Juniper (JNPR)

Payment processing companies:

ADP
Paychex (PAYX)
Global Cash Access (GCA)
Global Payments (GPN)
Master Card (MA)
MoneyGram (MGI)
Amdocs (DOX)
Convergys (CVG)
CSG Systems (CSGS)
Synchronoss (SNCR)

IT services:

Accenture (ACN)
Bearing Point (BE)
Sapient (SAPE)
Affiliated Computer Services (ACS)
Computer Sciences (CSC)
EDS
Unisys (UIS)
Cognizant (CTSH)
ExlService (EXLS)
Infosys (INFY)
Patni (PTI)
Satyam (SAY)
Witpro (WIT)

>

Let me reiterate this: A downgrade on this many stocks is worth noting, but does not mean the world is ending. Experienced traders know to have a plan in effect, to follow their discipline, and to not get panicked into doing something foolish — on the long or short side.

>

Sources:
Goldman Turns Wary On Tech Sector; Cuts Estimates, Targets For Dozens Of Stocks
Eric Savitz
Tech Trader Daily, November 30, 2007, 4:25 pm
http://tinyurl.com/yuqg75

Goldman Turns Cautious On Software, Citing Macro Factors; Cuts Ests
Eric Savitz
Tech Trader Daily, November 27, 2007, 9:41 am
http://tinyurl.com/ypl6u2

Category: Apprenticed Investor, Corporate Management, Earnings, Technology, Valuation

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Category: Credit, Derivatives, Earnings, Valuation

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Category: Data Analysis, Earnings, Valuation

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Category: Investing, Markets, Psychology, Valuation

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Category: Corporate Management, Data Analysis, Earnings, Investing, Valuation

Fannie Mae Looks Like Hell

Fannie Mae’s fuzzy math: Fortune magazine reported that the lender changed the way it discloses bad loans, which could be masking rising credit losses. “Investors might want to take a closer look at Fannie Mae’s latest earnings report. Lost in the unsurprising news of the mortgage lender’s heavy losses was a critical change in the…Read More

Category: Corporate Management, Credit, Derivatives, Short Selling, Valuation

Shipping to Lattes: The Problem of Higher Prices

Category: Consumer Spending, Earnings, Economy, Valuation

FASB 157 — Delayed, or Not?

Category: Corporate Management, Earnings, Valuation

Financials: Worse than they look?

Category: Corporate Management, Credit, Derivatives, Earnings, Psychology, Real Estate, Valuation

When Does GM Get Kicked Out of the DJIA?

Category: Corporate Management, Economy, Financial Press, Markets, Valuation