There are two forces that are about to come into play that will push the markets higher.
If you look at the aggregated market gains in each of the four years of a new president’s term, you see that the biggest run-ups always start just before the beginning of the third year. The strongest “surge” during the presidential election cycle is historically the next three quarters.
The second force that’s kicking into high gear right now that is also going to provide a boost to the market is an unstoppable tech boom.
Tech has outpaced the rest of the market over the last two years: The Nasdaq Computer index, which tracks computer-based companies, has risen more than 28% over the last 24 months! This tech rally is the exact reason why our holdings have become more focused on tech.
NetApp (NASDAQ: NTAP) operates in a field that is becoming increasingly important to companies: data storage and security. NetApp develops products that help businesses store data securely and prevent such events.
The company’s network-attached storage systems are designed for midsized to large enterprises. The company provides operating system, data management and content delivery software, which it sells to customers in communications, energy, health care, manufacturing and technology. Some of NetApp’s biggest customers: Boeing (NYSE: BA), Deutsche Telekom, and Yahoo! (NASDAQ: YHOO
).
In its latest quarter, NetApp’s sales rose 36% year over year to $1.14 billion. During the same period, its earnings rose 160% to $141.8 million, or 39 cents per share. Excluding extraordinary items, the company’s operating earnings were 49 cents per share, beating analysts’ expectations.
For the current quarter, NetApp provided earnings guidance of 47 cents and 50 cents per share, excluding extraordinary items, on sales of between $1.16 billion and $1.21 billion. Buy NTAP below $53.
Salesforce.com (NYSE: CRM) develops applications that manage customer information for sales, marketing and customer support. Now more than ever, companies need to know what their customers want at that exact moment in order to grab their attention.
Salesforce.com creates applications that generate sales leads, maintain customer information, and track customer interactions. More than 65,000 clients from a variety of industries, including financial services, telecommunications, manufacturing and entertainment, use Salesforce.com’s applications. Salesforce.com has also made its applications available via mobile phone.
In the second quarter, Salesforce.com’s sales rose 24.8% to $394.4 million from the same quarter a year earlier, topping analysts’ estimates for sales of $384.8 million. During the same period, its operating earnings rose to 29 cents per share, also beating analysts’ expectations of 27 cents.
Salesforce.com also raised guidance for 2011 to between $1.15 and $1.17 per share (from between $1.13 and $1.15 per share previously). Its yearly sales expectation also increased from between $1.55 billion and $1.56 billion to $1.6 billion. Buy CRM below $127.
As of this writing, Louis Navellier was recommending both CRM and NTAP to subscribers of his Blue Chip Growth newsletter.
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