After absolutely dominating the market last year, the technology sector has taken a mighty hit this week, down 3.3%, the same hit the S&P 500 has taken. There is no question that some of the tech leaders may have been the victim of start-of-the-year profit taking to roll 2014 gains in to 2015. In some cases, tax-loss selling may be the culprit to print against those gains. The real question for many investors is simple: Is the tech party starting to wind down?
A new research report from the Information Technology and Hardware analysts at UBS tracks the stocks that are the most overbought and oversold on a relative strength basis. Needless to say, this week’s volatility has skewed numbers for the stocks that were oversold even more. Here are five high-profile technology stocks that showed up on the UBS oversold screen.
Citrix Systems Inc. (NASDAQ: CTXS) is a top-rated stock to buy at many of the Wall Street firms that we cover. IBM’s software unit missed earnings badly last year, and Citrix is poised to grab business in this arena. By reason, some investors could consider that Big Blue may be keeping an eye on the company, looking to strengthen existing business while eliminating a very formidable contender in the space.
The Thomson/First Call consensus price target for the stock is $67.80. The stock closed Thursday at $56.98 a share.
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Intuit Inc. (NASDAQ: INTU) is a company that loves income tax time as its Turbo Tax product is one of the most widely used, and sales are expected to be very solid once again this year. Intuit is also well-known for the QuickBooks line of accounting software, which is used by firms big and small. The company announced this week it is launching QuickBooks Online Self-Employed, a new product that makes it easy for the rapidly expanding population of freelancers and independent contractors to handle small business accounting. Some estimates project that 43% of all workers will be self-employed by 2020.
Intuit investors are paid a 1.1% dividend. The consensus price target is $93.73. The stock closed Thursday at $85.08.
NetApp Inc. (NASDAQ: NTAP) is a top tech storage stock that has been blistered during the recent stock sell-off and at one point in the past 52 weeks was down 30% from January 2014 highs. The company is a provider of storage systems and data management solutions that form the foundation for efficient and flexible IT infrastructures. The company is one of the smaller players in the electronic storage industry, which could hurt it in competition with industry giants like EMC.
NetApp investors are paid a 1.7% dividend. The consensus price objective is $43.30. Shares ended the day at $38.45.
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SanDisk Corp. (NASDAQ: SNDK) was absolutely blasted when the company recently lowered its revenue outlook for the fourth quarter of 2014 based on a soft demand scenario. Following the announcement, the company’s shares plunged almost 14%. SanDisk’s quality, state-of-the-art solutions are at the heart of many of the world’s largest data centers and embedded in advanced smart phones, tablets and PCs. While some have speculated the slowing sales at Samsung are the reason for the revenue revisions, others on Wall Street think that the soft fourth quarter could be a one-off correction, and this will give investors an excellent entry point for the top stocks.
SanDisk investors are paid a 1.5% dividend. The consensus price objective is $104.34. Shares closed trading on Wednesday at $79.98.
TiVo Inc. (NASDAQ: TIVO) is a global leader in next-generation television services. TiVo’s innovative cloud-based Software-as-a-Service solutions enable viewers to consume content across all screens in and out-of-the home, providing an all-in-one approach for navigating the “content chaos” by seamlessly combining live, recorded, on-demand and over-the-top television into one intuitive user interface. The company continues to innovate, and its strong product pipeline is a major positive going forward. TiVo’s focus on forging deals with mid-tier operators (who will not build their own offering) is a prudent move in the view of many Wall Street analysts.
The consensus price target is $16.31, and TiVo shares closed Thursday at $10.37.
ALSO READ: The Bullish and Bearish Case for Cisco in 2015
Obviously the overall market has been in a free fall for most of the 2015 trading days, and earnings for the most part have disappointed. While these stocks are very oversold, careful buying may be the best plan for aggressive investors looking to add new stock to their portfolios.
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