I am closely following these three well-known large cap technology companies, and believe that each is a positive addition to any investor’s portfolio. As is always the case, investors need to keep in mind that diversification across many sectors is king.
Sorry bears, Apple Inc. (NASDAQ:AAPL) is not going anywhere
Apple has a fantastic risk/reward ratio and it would not be unrealistic to see $600 by this time next year. Granted, Apple does have decelerating earnings in a much more intense competitive environment, but the current price already reflects the increasing competitive pressures, and does not properly factor in a return to growth in 2014, as gross margins stabilize and a number of catalysts could drive growth.
Finally: After ten years, this tech giant’s stock is finally taking off
I will be the first to admit that I am not a fan of owning Microsoft Corporation (NASDAQ:MSFT) stock. In fact, I have been highly critical of the tech giant for not doing enough to satisfy shareholder demands. Today I changed my mind.
Despite growing concerns about a global slowdown in PC sales, shareholders can rejoice that the stock is trading near a 52-week high. Part of the reason for the rise in Microsoft Corporation (NASDAQ:MSFT)’s stock was an announcement that a major hedge fund, ValueAct Capital Management, disclosed a whopping $2 billion stake. Coupled with a better than expected quarterly earnings report, the stock might finally be poised to end its 10+ year drought.
Looking at the stock since March 11, Microsoft is up 11% while the S&P 500 is down 0.3%. From a technical point of view, Microsoft Corporation (NASDAQ:MSFT)’s 50 day moving average ($28.34) has been rising since late January and approaching the 200 day moving average of $28.69. Both fundamental and technical analysts make an extremely positive case for an investment in Microsoft.
Sit back, grab some popcorn and enjoy the show!
It’s official: Netflix, Inc. (NASDAQ:NFLX) is a winner, and there aren’t many other companies like them. Its product is not only fantastic, with one of the highest customer satisfaction rates, but it is doing all the right things to continue satisfying both shareholders and customers.
On April 22, Netflix announced quarterly results that blew the street away. The stock moved 25% higher based on 3 million new subscribers in the quarter. Netflix has recovered impressively from their rate-hike fiasco that angered both shareholders and investors. So what is Netflix doing right? For starters, the company has revolutionized entertainment by creating original popular content with a “watch what you want, when you want” philosophy. Keeping with their already proven model of offering top-notch content, Netflix, Inc. (NASDAQ:NFLX) has secured exclusive content with Disney in a deal valued at around $500 million a year.
The momentum for Netflix will continue for years, as the company is likely to continue producing high-quality original content, spreading across various genres. Plus, Netflix will be streaming a brand new season of Arrested Development, which according to many of my friends is reason enough to join the service.
Conclusion
The technology sector is crowded with many large cap companies that each offer the possibility of long term returns. I believe that the companies that I have selected will continue to be major players in their individual segments and will reward shareholders with consistent returns. Generally speaking, it is wise to invest in companies whose products you enjoy. My iPhone is a great tool I use for both business and personal use and I can’t wait for a new version. I can’t go a day without watching some TV shows on Netflix. Granted, Windows 8 is not spectacular but Microsoft Corporation (NASDAQ:MSFT) has finally done something right if investors are buying.
The article Three Tech Companies You Need to Buy originally appeared on Fool.com and is written by Jayson Derrick.
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