Skip to main content

Tech sector earnings scorecard - tech still can't get no respect

Last week I posted my first tech earnings scorecard for this earnings season. Tonight's results are a continuation of the theme.

This week I added a couple of new measures. I now track whether the stock beat First Call estimates by 20% or more and whether it showed 20% or more growth in earnings year-over-year.

There have been so many stocks reporting that I have opted not to display a table of results as it would be just too long. Instead, I'll present a summary of the numbers I have assembled thus far during this earnings season. These numbers include the stocks that reported over the course of the last three weeks including tonight, Monday.
  • We have tracked 167 tech stocks so far
  • 146 stocks beat First Call estimates which amounts to 87%
  • 44 of those stocks beat earnings estimates by 20% or more
  • 100 stocks showed at least some year-over-year earnings growth whether they beat estimates or not
  • 41 have shown year-over-year growth in earnings of 20% or more
  • 98 stocks have shown year-over-year revenue growth. That amounts to about 58%
  • 35 have shown revenue growth of 20% or more
  • 88 have provided upside guidance which amounts to about 52%. 
  • 27 others provided mixed or in-line guidance.
  • Only 3 stocks offered downside guidance
Given that we are still in the early stages of recovery from the Big Recession, these results look pretty darn good. Yet tech was the worst performing sector in the last two weeks of January.

I still contend that tech deserves more respect, especially in light of the relatively good guidance being provided and the fact that topline growth is being registered in more than half of those stocks reporting. This means that for many of these companies, earnings are not merely the result of cost cutting.

Keep an eye on this sector. Investors should catch on soon and tech could resume their leadership role.

    Comments

    Popular posts from this blog

    Time to be conservative with your 401K

    Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...

    The Trouble with Trend Reversal Indicators

    Many of us use various trend reversal indicators to time our trades. Our desire is to determine when prices have changed direction so that we can ride the new trend. Why doesn't it always work out? The first reason, of course, is that unforeseen events often drive prices in unexpected directions. That is something we can't change and it often makes all of us technical traders crazy. On the other hand, sometimes an unforeseen event is a prelude to a new trend. A stock spikes up on a what seems to be a one-time piece of good fortune and soon falls back. Does it start making its way back up or does it resume a previous down trend? The conflict within trend reversal indicators is that, though they can definitely tell when prices change direction, they suffer from two problems. One, they often can't determine how significant that move in prices actually will be. Two, they are often lagging indicators. As such, they can be late in providing a signal, sometimes leading the investo...

    Unlock Stock Market Profits - Key #4

    This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what...