Finding the undervalued hardware system/IC stocks in '08 --- Named the top-7
Recession is here. US consumer spending will slow down. Stagflation is the problem. US government will do little to help for another year under the current president, you know who. House price keep going down so is USD. Gasoline price at the pump is hovering between 3~4 dollar. Many colleage gradudates cannot find any decent job.
Stocks has gone down up straight for many days in the beginning of Jan'08,especially technology stocks. So what do we do? Interest is low. Buying gold? Investing in foreign currency?
If you are a long term holder, you are certainly able to find more valued stock than last year.
Now I'm talking about the undervalued US tech stocks. Hardware or IC stocks are more likely to get oversold as they are more cyclical in nature in comparison to software stocks. Here comes my list:
7. INTC @ $22.88 --- It is a monopoly. AMD is a goner. Even though it has failed many time trying to stimulate meaningful growth in other areas outside of its core CPU business, it now has more power to control its profit margin and will be able to cushion US enconomy woes. Target $27.
6. MRVL @ $12.00 --- I wish it to go down to single digit, but I would add a little position at this price. Target $16.
5. DELL @ $21.26 --- It is not a growth story anymore but it now represent as a value play at this level. Target $28.
4. CY @ $32.20 --- Like VMW to EMC, the rising solar player SPWR is one of the CY's biggest assets. Let alone CY itself has been very successfully tranforming itself in recent years. Target $42.
3. QCOM @ $36.45 --- After a few setbacks on legal fronts, this is a undervalued growith stock to be considered. As long as its royalty model not changed, growth in 3G wireless and beyond is almost certain for Qualcomm to enjoy in the coming 5 years. Target $60.
2. BRCD @ $6.38 --- With forward PE below 10 and 2X BV, it is overly undervalued. Target $10.
1. RFMD @ $5.00 --- With BV close to 4 dollar, I would probably get some credits out of my house to bet on it now. Target $8.
People are looking for change in the election year. Market sentiments may change later on as we now all know that economy is a big topic of '08 presidential election.