4 tech trades ahead of earnings
Google and IBM are among the bellwethers reporting next week.
As we move into the heart of the fourth-quarter earnings season, the team at Stock Traders Daily is turning its focus to the tech sector. A number of prominent names in the industry will announce their earnings early next week.
Here are four trades to consider pulling the trigger on prior to the verdict.
Blue chips barreling ahead
Traders can expect heavy action on Google (GOOG) ahead of the Bay Area giant's Q4 earnings announcement on Tuesday after the market close. Wall Street is calling for an 11.7% upswing in EPS on a 52.3% surge in total revenue.
The tape on Google has looked promising since its 50-day moving average broke above its 200-day moving average in August. After a brief pullback, shares have steadily pushed higher.
I expect to see the trend continue following the earnings release as the company still has plenty of room to grow in the mobile display advertising space. It is a safe long-term bet with a fair amount of upside potential.
Another blue chip technology name slated to report its quarterly earnings on Tuesday is IBM (IBM). The company is expected to announce an 11.5% rise in earnings per share (EPS) despite a projected 1.2% dip in total revenue from the prior year quarter. Shares of the stock have pulled back significantly since an October high, but a reversal could be in the cards given IBM's track record. It has topped estimates in each of the past four quarters.
Last year was one that shareholders of Advanced Micro Devices (AMD) would rather forget as the stock shed more than half of its value. 2013 is not setting up to be much more promising. The company is facing an uphill battle against rival Intel and recently had its credit rating cut by S&P.
AMD is slated to report its quarterly results on Tuesday afternoon. Analysts are expecting a loss of $0.20 per share compared to a $0.19 per share profit last year. Sales are expected to crater to the tune of 32.0%. Right now, this stock looks to be dead in the water. Traders should take cover.
One other semiconductor name for traders to watch is Texas Instruments (TXN). The company will unveil its Q4 numbers after the closing bell on Tuesday. Analysts are calling for Texas Instruments to report a 29.2% slide in EPS on a 13.8% decline in total revenue versus the year-ago quarter. At a forward price-to-earnings ratio of 18.5, this stock is not overly cheap at the moment. Traders would be better served by looking to buy on a dip should one present itself subsequent to the release.
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These hot movers could rise by double digits in coming months.
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