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4 Tech Stocks In Need Of Some Holiday Spirit
The technology sector has mounted a strong comeback in 2009 after a dismal showing in 2008. There have been some spectacular individual performances within the space. As of late, there have been some notable names that have been pulling back in the tech arena. Here are four tech stocks in need of some holiday spirit.
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Downgrades Galore
In late morning trading action on Friday, shares of Take-Two Interactive Software (Nasdaq: TTWO) were down 30% from Thursday's close. The stock was punished after Take-Two lowered it financial forecast. The company is now anticipating larger losses for 2009 and for the first-quarter next year than had been expected by analysts. Due to the shortfall of forecasted figures, several analysts downgraded the stock.
In its press release, Take-Two cited the performance of its Major League Baseball titles in Q4 as being the largest contributor to its downward revision. Capitalized software impairment charges and inventory write-downs also led to management's weaker-than-expected outlook. This one day drubbing has reversed substantially all of the stock's gains on the year.
Shares of Brocade Communications Systems (Nasdaq: BRCD) have also experienced a steep descent since early November when Hewlett-Packard (NYSE: HPQ) acquired 3Com (Nasdaq: COMS) for $2.7 billion. This acquisition dashed hopes that HP might acquire Brocade rather than 3Com. Shares of BRCD have cratered over 20% since this the merger announcement.
Cloudy Skies
The retreat in shares of the solar company Energy Conversion Devices (Nasdaq: ENER) has been a bit more sustained than those of TTWO and BRCD. Year-to-date, ENER shares have lost 59.7% of their value.
In November, ENER reported a net loss of $11.8 million as new construction and reroofing projects have slowed. In order to reverse course, the company is now looking to restructure and has said that it will drop the axe on approximately 20% of its workforce. ENER is hoping that this move will eventually generate $17 million in savings annually.
Palm Concerns
Shares of the handset maker Palm (Nasdaq: PALM) arose from the ashes this year as the result of a revamped line of smartphones. From the beginning of the year until early-October when Palm hit a 52-week high, the stock rose nearly 300%. More recently, shares have come back down to earth. Palm now trades approximately 35% below its September high as concerns now loom over the stock that a crowded smartphone market will pressure the company's top line results.
The Bottom Line
Tech stocks in general have had a remarkable run thus far in 2009. There have been some exceptions within the space and the instances above should serve as a reminder to investors that there may be some bumps in the road as the economy begins to recover. (For information regarding sector based investing, refer to Sector-Based ETFs Spread out Risk.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: Top 10 Forex Trading Rules
Downgrades Galore
In late morning trading action on Friday, shares of Take-Two Interactive Software (Nasdaq: TTWO) were down 30% from Thursday's close. The stock was punished after Take-Two lowered it financial forecast. The company is now anticipating larger losses for 2009 and for the first-quarter next year than had been expected by analysts. Due to the shortfall of forecasted figures, several analysts downgraded the stock.
In its press release, Take-Two cited the performance of its Major League Baseball titles in Q4 as being the largest contributor to its downward revision. Capitalized software impairment charges and inventory write-downs also led to management's weaker-than-expected outlook. This one day drubbing has reversed substantially all of the stock's gains on the year.
Shares of Brocade Communications Systems (Nasdaq: BRCD) have also experienced a steep descent since early November when Hewlett-Packard (NYSE: HPQ) acquired 3Com (Nasdaq: COMS) for $2.7 billion. This acquisition dashed hopes that HP might acquire Brocade rather than 3Com. Shares of BRCD have cratered over 20% since this the merger announcement.
Cloudy Skies
In November, ENER reported a net loss of $11.8 million as new construction and reroofing projects have slowed. In order to reverse course, the company is now looking to restructure and has said that it will drop the axe on approximately 20% of its workforce. ENER is hoping that this move will eventually generate $17 million in savings annually.
Palm Concerns
Shares of the handset maker Palm (Nasdaq: PALM) arose from the ashes this year as the result of a revamped line of smartphones. From the beginning of the year until early-October when Palm hit a 52-week high, the stock rose nearly 300%. More recently, shares have come back down to earth. Palm now trades approximately 35% below its September high as concerns now loom over the stock that a crowded smartphone market will pressure the company's top line results.
The Bottom Line
Tech stocks in general have had a remarkable run thus far in 2009. There have been some exceptions within the space and the instances above should serve as a reminder to investors that there may be some bumps in the road as the economy begins to recover. (For information regarding sector based investing, refer to Sector-Based ETFs Spread out Risk.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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