The markets have been off to a great start in 2013, with the S&P 500 (INDEXSP:.INX) gaining close to 12% in the first three months of the calendar year. Who would have thought that this was possible as 2012 drew to a close, with last minute wrangling over the fiscal cliff deal and the sticky situation in Europe? However, the stock market has rallied strongly, and those who had their money invested in the right stocks must be sitting on a pile of profit.
I was one of those many bloggers who picked stocks for the New Year, in an effort to guide readers to the best possible ways of utilizing their hard-earned dollars by investing in the right stocks. With one quarter of the calendar year and an earnings season in the rearview mirror, I think it’s the right time to see how my picks performed during the period.
| Company | Expectation | 1Q Returns |
|---|---|---|
| Micron Technology (NASDAQ:MU) | Will Appreciate | 62.71% |
| Ciena | Will Appreciate | 4.44% |
| Cree (NASDAQ:CREE) | Will Appreciate | 64.79% |
| Giant Interactive (NYSE:GA) | Will Appreciate | 20.82% |
| Finisar | Will Appreciate | -16% |
| JDS Uniphase | Will Appreciate | 1.56% |
| Family Dollar Stores | Won’t Appreciate | -5.82% |
| ADTRAN | Won’t Appreciate | 1.55% |
| Xilinx | Will Appreciate | 8.09% |
Stock price data (from Dec. 31, 2012 to March, 28, 2013) taken from Google Finance
Thus, I was mostly on the spot with my picks, with the likes of Micron Technology, Inc. (NASDAQ:MU) and Cree outperforming my own expectations. But the relevant question now is — where are these stocks headed from here? I will look at the top three performing picks of mine in this post, and see if they can sustain their momentum, while the rest of the stocks will be covered in a later post.
Micron is poised to spike
Towards the end of 2012, I had advised investors to hang on to their long positions in Micron, and what a terrific recommendation it turned out to be. Micron’s ascent began as signs of a rebound in the pricing of NAND and DRAM chips started appearing. The company’s latest quarterly report established the fact that it is indeed witnessing an improvement in the average selling prices of its memory chips. What’s more, the company is expecting a solid demand environment to complement improved pricing.
Micron Technology, Inc. (NASDAQ:MU) expects its mobile DRAM business to grow further, driven by the presence of two heavyweight smartphone makers on its client list, according to its President, Mark Adams. Ever increasing sales of mobile devices are expected to push demand for NAND flash higher. Moreover, Micron’s solid-state drive (SSD) business is expected to continue growing after jumping 40% in the previous quarter.
In addition, DRAM shipments for networking got off to a strong start. With the expected increase in telecom spending, led by the likes of AT&T Inc. (NYSE:T), Micron Technology, Inc. (NASDAQ:MU) is expecting is expecting its DRAM bit shipments to the networking sector improve further. Also, once Micron completes the acquisition of Elpida, it would have a better command over the DRAM and mobile DRAM market. All in all, things seem to be looking up for Micron and I don’t see any reason why it shouldn’t continue its ascent.
Cree lights up once again
Light-emitting diode (LED) maker Cree is one stock which has defied gravity in the true sense of the word. The stock had met with downgrades toward the end of last year, analysts were citing a high trailing P/E and growing competition as the reasons why Cree shares could drop. But I was pretty sure that the company would continue its trailblazing run in 2013, and it has done so quite handsomely as evident from the chart above.
