Every earnings season, all eyes turn toward the big tech stocks to see which are delivering the results that can drive the stock higher … and which will fall short of expectations. As the market advance continues to thin out, you need to focus on those delivering the best results that can attract the attention of the big money that provides the buying pressure needed to lift stocks higher.
With that in mind, let’s take a look at some big tech stocks and how they look headed into reporting season.
Apple (AAPL) remains one of the very best tech stocks to own. Consumers love Apple’s products — Apple doesn’t have customers so much as devotees. Analysts continually underestimate this company; Apple has had small positive earnings surprises for the past four quarters in a row. As we get closer to the July 22 earnings release, several AAPL analysts have raised their expectations for Apple stock. Currently the consensus is for Apple to earn $1.22 a share on revenues of $37.8 billion … but I will not be surprises if Apple beats expectations once again. Portfolio Grader upgraded AAPL stock back in May and is a “strong buy” in front of earnings.
I know a lot of the tech-savvy crowd dismisses Facebook (FB) as being out of step. And sure, it’s not as hip as some of the newer social media sites that pop up just about every day. Still, there are plenty of us “old” folks who like using Facebook to stay in touch with family and friends. And a little surfing shows that plenty of millennials and Gen-Xers are active users of the leading social media site.
Facebook has delivered four solid positive earnings surprises in a row, and I expect another when the company reports earnings on July 23. FB analysts expect Facebook to report earnings of $0.32 a share on sales of $2.8 billion for the quarter. Our stock-rating tool Portfolio Grader upgraded FB stock to a “strong buy” last December and remains an “A”-rated stock as we head deeper into earnings season.
Texas Instruments (TXN) is another well-positioned tech stock as the earnings release nears. The semiconductor giant has delivered a positive earnings surprise in three of the past four quarters, and TXN analysts have increased their expectations sharply in the last three months. Management at Texas Instruments has been very shareholder-friendly; the company uses a big portion of its cash flow to buy back stock and pay dividends.
Analysts expect Texas Instruments to earn $0.59 a share on revenues of $3.27 billion when it reports July 21 — and I expect a strong number that can move the stock higher. Better expectations led Portfolio Grader to upgrade TXN stock to an “A” this week — it’s a “strong buy” ahead of earnings.
Especially as the market advance thins out, it’s critical to own the right tech giants that have the very best fundamentals — and avoid those that are falling behind. These three tech stocks have the characteristics of winning stocks and should move higher in the second half of 2014 as a result of stellar fundamentals.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth,Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.