Good news, folks. The economy is beginning to stabilize,
and companies with business clientele are optimistic that
corporate spending will pick up next year.
Some analysts project that business spending on software
and equipment finally rose in the third quarter, following
six consecutive quarters of declines, according to
The Wall Street Journal. Technology, in particular,
may be the first sector to clock positive growth in corporate
expenditures.
During the recession, companies have hoarded cash on their
balance sheets and slashed expenditures. Those measures leave
them poised to begin fattening up their profit margins once
sales kick in -- which may not be that far off.
Advanced Micro Devices (NYSE: AMD) says it
expects technology purchases to increase starting next year,
after nearly halting during the recession. The falling dollar
could also aid companies' bottom lines, since many technology
companies generate a large portion of their revenue
abroad.
Certain companies within the technology arena are already
beginning to show top-line growth. Tech bellwether
Intel (Nasdaq: INTC) posted a sales increase
in the third quarter, on an uptick in demand for chips for
laptops and netbook computers. Best of all, the company said
the sales increase wasn't due simply to an inventory bump,
but instead represented the beginning of a real increase in
demand.
As these trends become more pronounced, the tech sector's
fundamentals will strengthen, and its stock prices should,
too. Given these improving conditions, investors might want
to add a little exposure to technology in their
portfolios.
I turned to the
CAPS screening toolto uncover strong tech companies
potentially poised to take off following this downturn. My
search criteria included:
ratingsof four or five stars, the highest ratings from
our CAPS community.
A
current ratioof 1 or greater to ensure liquidity.
Minimum
market capof $200 million.
Return on equity of 15% or greater.
Minimum price of $5 per share.
Five or more Wall Street outperform ratings.
Here's what my screen turned up. You can
runit, too; just remember that your results will likely
differ as the data updates:
Company
Market Cap
Current Ratio
Return on Equity (TTM)
CAPS Rating
Check Point Software
Technologies (Nasdaq: CHKP)
$6.3 billion
2.6
15.0
****
Cisco Systems (Nasdaq: CSCO)
$138.8 billion
3.2
15.9
****
Infosys Technologies (Nasdaq:
INFY)
$27.3 billion
5.7
31.0
**** Continued... |