4 Tech Buys And A Sell From Jim Cramer
For the week ending February 8 2013, Jim Cramer covered more companies with a bearish tone. Of the 39 calls made, Cramer was bearish on nearly one-quarter, or 25%. This is a slight increase from the previous week, in which 20% of the companies mentioned were negative. The Nasdaq Index ( QQQ) rose around 0.49% for the week, while the S&P 500 ( SPX) continued its ascent, up 0.37%. [Related list: 3 Buys, 2 Sells from Jim Cramer as Dow Reaches 14,000 ]
The continued rise in markets attracted investors, despite risk rising that stocks will correct to the downside. Any drop in stocks will likely be driven by company-specific bad news. For example, voice and language solutions maker Nuance ( NUAN) plunged after reporting weak sales for its health care segment. Akamai ( AKAM) dropped after giving light Q1 guidance.
A few notable calls made by Cramer last week are:
Analysis and Discussion
Analysis and Discussion
Akamai Technologies, Inc. ( AKAM). Buy. Akamai could be facing heavy competition, which will hurt profits. Akamai, over the last few quarters, focused on higher-margin cloud apps, security, and e-commerce to differentiate itself from rivals. The dual focus on low-margin and high margin segments was discussed at the conference call. This did little to stop the company from recovering from the 15% drop for the week.
Facebook, Inc. ( FB). Buy. Facebook shares failed to rise last week, despite quarterly results from Zynga ( ZNGA) and LinkedIn ( LNKD). Zynga reported a decline in R&D and operational costs, but still relies on Facebook as a source of revenue. LinkedIn reported strong sales growth in all segments of its business. Talent Solutions rose 90% year over year, while ad sales increased 68%. Users are slowing down in their use for Facebook. In a Pew survey, 61% said that they took a break of several weeks or more at least once. 28% said the site is less important to them compared to a year ago.
Google ( GOOG). Buy. Google shares are at a 52-week high, closing recently at $785.37. Chairman Eric Schmidt made the headlines, as it was disclosed that he will sell 42% of his stake in the company. Despite his 1% ownership (and 3.2% voting power), this could limit further upside for Google. When Microsoft ( MSFT) executives sold shares regularly in the past, upside in Microsoft shares was limited for several years.
Google shares were downgraded by two analysts. During the week, the company announced a display ad-deal with Yahoo ( YHOO).
Netflix, Inc. ( NFLX). Buy. Shares are close to a 52-week high, closing recently at around $181. Rival Coinstar ( CSTR) is vying to compete more effectively against Netflix. Coinstar’s voice streaming service is still in beta. Netflix emailed former subscribers a 1-month free offer. This trial may be canceled anytime. Users who stay onboard may get Netflix service for $7.99 a month.