The Stock of the Decade? Our New Recommendation Could Be!
Lance Spicer, Editor - Trident Confidential, 21 Apr 2011, 12:01 PM
In the past 24 hours the earnings results from Technology powerhouses Intel, IBM and Apple have left businesses, commentators, analysts and investors stunned. Their growth in earnings and sales has been nothing less than exceptional and has forced many investors to re-think their gloomy predictions for the US economy and the largely ignored technology sector.
Just this morning Apple stunned the investment world with earnings per share for the quarter of $6.40. This is double what they were a year ago! However, the analysts, even with their optimistic forecasts expected only $5.37. On top of that, profit margins increased to 41% while expectations were only for 39%. Sales also stunned, by beating expectations by well over a Billion dollars. If you were wondering, Apple is in our portfolio and yes we did recommend that subscribers buy it last week, before the earnings announcement. Those people would be pretty happy with their investment today, particularly with the very positive guidance Apple has provided.
Now, this is only the very beginning of earnings season, there will be more surprises like these that have seen investors re-focus on the tech sector. On the back of this early news, we have seen many of our current portfolio stocks soar as much as 10% just last night. While this is a huge lift for our returns, I don’t think this is the end, in fact, it’s possibly only the beginning of what I see as a technology boom coming our way over the next couple of years as data storage, cloud computing, wireless communications, programmable chips, SOC’s (Systems on a Chip), 4G and internet usage and capacity drive certain technology stocks into the “stratosphere”. Unlike the tech boom and bust of the late 1990’s and early 2000’s, this time the companies I am investing in have real profits and sales growing at 20%-100% p.a. with solid cash-flows, clean balance sheets with little or no debt and high profit margins.
If you were wondering how to leverage into Emerging Markets – this is the way. Investing in miners has been a favourite of Australian investors for years, but with lingering doubts over the Carbon Tax, anti-mining lobbies, increasing production from Africa and our strong dollar reducing profits, another way of making money from emerging markets is to invest in technology. The growth of China and India, as well as other parts of Asia and also Latin America will increase their prosperity through increased technology usage. Many western companies now see their biggest growth opportunities are in emerging economies. This is something you don’t want to miss out on.
Our New Recommendation is almost a Monopoly!
In this week’s Trident Confidential, I listed 10 technology stocks I want investors to buy now and all of them are going to be great buys for the next few years. In fact, one of them, this week’s featured stock, maybe the only tech stock you’ll ever need, as it already controls 90% of the fastest growing technology sector and is touted as a “possible” takeover target due to its technological dominance in this new sector.
This technology sector is growing exponentially and will deliver this “smallish” company massive cash profits. It’s profit margin is over 90%! It’s customers are just about every technology company you can think of. For example, Microsoft and Google rely on this company to provide “the technology heart” of their products. Investors should not miss out on this stunning opportunity before you start hearing more about them in the mainstream press. You can read about this company in this week’s Trident Confidential edition.
While we do recommend buying Australian shares (last week’s new Aussie pick is already up over 12%) we also advocate that investors consider buying US shares with the Australian dollar so high. This is one of the key investment strategies for the coming year as very few economists or analysts expect it to stay up here too much longer and even the Federal Government has realised that its strength is detrimental to the economy’s health (and tax revenue collections) and will be doing all in their power to drive it back down well under US$ parity. Our broker makes buying US shares as easy as buying Australian and the brokerage is also 30% cheaper than our already very low rates for Australian shares. Trident Confidential Members get access to our very low rates and assistance with our well-respected Australian broker who is also available to assist our members over the phone. Our Trident Confidential User’s Guide will fill in all the “blanks” if you have never invested in shares or are new to US shares.
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Until next time,
Kind Regards,
Lance Spicer
Trident Global Growth Fund - Fund Manager
Trident Confidential - Editor