No one knows if the market is just letting off a little steam prior to its next run or further deflation of stock prices is in the cards. After a run-up in many stocks seen in 2013, it’s normal and healthy for investors to take money off the table and tempting for others looking for too-good-to-pass-up opportunities.
Granted, if a sell-off comes as a result of a collapsing industry, economic downturn, or a profits-altering event specific to a company, a downturn in share price should raise a red flag. But I don’t see that today, especially in the technology sector where so many companies offer value, growth, stability and products and services that have become necessities in today’s consumer and IT worlds.
That said, here are five tech stocks that look very appetizing at current prices. They are all well below their 52-week highs and down a decent clip in 2014. I’d hit the trigger as fast as you can on these; the sale won’t last long.
- Current Price: $512
- YTD: -8%
- Percentage below 52-week high: 12%
Shareholders weren’t very happy when Apple (AAPL) reported fewer-than-expected iPhone sales in the first quarter of fiscal 2014. After all, 56% of Apple’s revenue is attributed to smartphones and coming up 4 million short did make a dent in year-over-year growth in that segment.
However, we’ve seen this ebb and flow so often and for so many years, it’s hard to imagine Apple stock won’t bounce back with authority once another Apple gadget or cool version of the iPhone are rumored to be in development.
Over the past year, Apple has been paying out around $2.5 billion in dividends every quarter, a figure that increased 15% to $2.8 billion last year when Apple increased dividend payments to the holders of its 892.55 million outstanding shares. At the current stock price of $514, the dividend yield is 2.37%.
- Current Price: $152
- YTD: -13.4%
- Percentage below 52-week high: 21%
China is the biggest Internet market in the world and Baidu (BIDU) controls 65.7% of it as the leading Chinese language Internet search provider. Plus, China has surpassed the U.S. as the largest market for smartphones in the world. Baidu is aggressively investing in mobile products.
Baidu acquired app store 91 Wireless for $1.9 billion, and revenue from Baidu’s core mobile search app grew 50% in 2013. Analysts expect the company’s revenues to jump 41% for the full year 2013, year over year. Baidu is expected to report earnings on Feb. 26.
- Current Price: $346
- YTD: -12%
- Percentage below 52-week high: 17%
Weakness in shares for early 2014 has been described as “unusual” for e-commerce giant Amazon (AMZN). I might take that a step further and say “outrageous.”
Amazon’s sales over the holidays broke all company records as the most successful online retailer of the season in one of the most rapidly growing sectors of the economy.
But I’ve always liked Amazon Web Services, its cloud computing business, as the main impetus of future growth. A recent report by Morgan Stanley analysts predicted that AWS could contribute $24 billion for Amazon within 10 years.
Another report by Gartner stated that “Amazon has reached a staggering level of dominance in enterprise-level computing services for big companies. It is a thought leader; it is extraordinarily innovative, exceptionally agile and very responsive to the market.”
- Current Price: $23.90
- YTD: -6%
- Percentage below 52-week high: 16%
EMC (EMC) reported a strong set of fourth-quarter results recently, led by a 10% growth in the Information Storage division and sustained growth from EMC-owned VMware (VMW).
Pivotal Initiative, an organization that combines VMware’s data center software and EMC’s big data technology, is expected to bring in over $1 billion by 2017. VMWare is not EMC’s only acquisition success. Since that winner 10 years ago, the company has taken over RSA Security, Data Domain, Isilon and XtremIO, all fast-growing and profit-generating businesses within EMC.
- Current Price: $31
- YTD: -6%
- Percentage below 52-week high: 16%
CA Technologies (CA) is involved in a rapidly growing and necessary part of IT. It’s called Data Center Infrastructure Management or DCIM. All you really need to know about it from an investors’ point-of-view is its staggering market potential. Fewer than 10% of mid- to large-sized data centers utilize it, and 451 Research says DCIM supplier revenue will reach $1.8 billion by 2016, representing a 44% compound annual growth rate. While migrating away from mainframe services, the DCIM provider is also focusing on growing its cloud market share.
Cloud is estimated to become a $148.8 billion global market in 2014, $160 billion in 2015, and $207 billion in 2016, and CA Technologies is perfectly poised to share in the boom.