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Reportedly, technology leaders are set to meet President-elect Donald Trump in a summit to be held on Wednesday (Dec 14, 2016). Per The Wall Street Journal, the small selective group is expected to include top-executives from Apple, Alphabet, Amazon, Cisco, Facebook, IBM (IBM - Free Report) , Intel, Microsoft and Oracle Corp., along with Tesla Motor’s (TSLA - Free Report) Elon Musk.
The event is significant for the technology and allied sector as it grapples with growing uncertainty over Trump administration’s economic policies and its impact on the industry.
Notably, top-most technology leaders of the Silicon Valley had openly protested against Trump’s rhetoric during election campaign. The President-elect had threatened to force technology companies like Apple to bring their overseas manufacturing operations back to the U.S.
Moreover, Trump’s views over antitrust enforcement, trade protectionism, immigration policy (particularly issuance of H1B visas used to hire skilled foreigners) and net-neutrality (Donald Trump is known as a criticizer of this policy) are some of the major headwinds for the U.S. technology companies like IBM, Alphabet and Netflix (NFLX - Free Report) .
Another concern is Trump’s determination to cut clean energy spending. Most of the big technology companies have been moving toward clean energy with the help of government tax breaks. Any spending cut will certainly be a dampener on these plans.
Technology Sector and Donald Trump – Common Ground
Despite the verbal volleys and pre-election enmity, it is now quite clear that none of them – Donald Trump nor the Silicon Valley bigwigs – can ignore each other. For the sake of smooth running of their businesses as well as the U.S. economy, a “common ground” is necessary as observed by the Cowen & Co. analyst Paul Gallant.
Corporate tax reform that has been blatantly advocated by the President-elect since early days of his campaign is an issue that can bring technology leaders and Donald Trump to a truce.
Per data from Moody’s Investors Service Apple, Microsoft, Alphabet, Cisco and Oracle together made up almost 30% ($504 billion) of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015. According to figures from the WSJ: “Apple alone holds about 91% of its $237.6 billion in cash offshore.”
Notably, the U.S. government currently levies a 35% tax rate on repatriated cash, which Trump has promised to lower to 15%. An ideal restructuring of tax rates will enable companies like Apple to bring back a major part of their offshore cash to the U.S.
Will Technology Stocks Rebound?
Since Donald Trump’s selection (Nov 9), we note that the Zacks Computer & Technology industry has returned a modest 2.12% as compared with S&P 500 Composite’s gain of 4.22%. However, we believe that the upcoming meet will ease out some of those concerns that will eventually help the stocks to rebound.
We use our VGM Score to track technology stocks that shows characteristics to outperform the broader market. Our research shows that stocks with a VGM Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential.
Here we pick five stocks that have a favorable combination of VGM score of ‘A’ and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Moreover, these stocks have returns of more than 15% since the election of Donald Trump.
Our Picks
Santa Clara, CA-based Applied Materials Inc. (AMAT - Free Report) is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. Its earnings estimate for the current year has increased by 13 cents (5.7%) to $2.40 per share in the last 30 days.
Since Nov 9, Applied Materials has gained a massive 258.09%.
Headquartered at Simpsonville, SC, KEMET Corp. (KEM - Free Report) is the world's largest manufacturer of solid tantalum capacitors and one of the world's largest manufacturers of multilayer ceramic capacitors. Its earnings estimate for the current year has remained steady at 29 cents in the last 30 days.
The stock has returned a strong 63.68% since Nov 9.
KVH Industries Inc. (KVHI - Free Report) is a leading manufacturer of solutions that provide global high-speed Internet, television and voice services via satellite to mobile users at sea and on land. Headquartered in Middletown, RI, the company has active operations in Denmark, Hong Kong, the State of Illinois, Japan, Norway, Singapore, and UK.
KVH’s earnings estimate for the current year has remained steady at 30 cents in the last 30 days. The stock has surged 33.53% since Nov 9.
Jasper IN-based Kimball Electronics Inc. (KE - Free Report) operates as a contract manufacturer of durable goods electronics. The company has manufacturing operations primarily in the U.S., Mexico, Thailand, Poland and China. Its earnings estimate for the current year has remained steady at 93 cents per share in the last 30 days.
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
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Top Tech Leaders to Meet Trump: 4 Stocks in Focus
Reportedly, technology leaders are set to meet President-elect Donald Trump in a summit to be held on Wednesday (Dec 14, 2016). Per The Wall Street Journal, the small selective group is expected to include top-executives from Apple, Alphabet, Amazon, Cisco, Facebook, IBM (IBM - Free Report) , Intel, Microsoft and Oracle Corp., along with Tesla Motor’s (TSLA - Free Report) Elon Musk.
The event is significant for the technology and allied sector as it grapples with growing uncertainty over Trump administration’s economic policies and its impact on the industry.
Notably, top-most technology leaders of the Silicon Valley had openly protested against Trump’s rhetoric during election campaign. The President-elect had threatened to force technology companies like Apple to bring their overseas manufacturing operations back to the U.S.
Moreover, Trump’s views over antitrust enforcement, trade protectionism, immigration policy (particularly issuance of H1B visas used to hire skilled foreigners) and net-neutrality (Donald Trump is known as a criticizer of this policy) are some of the major headwinds for the U.S. technology companies like IBM, Alphabet and Netflix (NFLX - Free Report) .
Another concern is Trump’s determination to cut clean energy spending. Most of the big technology companies have been moving toward clean energy with the help of government tax breaks. Any spending cut will certainly be a dampener on these plans.
Computer and Technology Sector Price Index
Computer and Technology Sector Price Index
Technology Sector and Donald Trump – Common Ground
Despite the verbal volleys and pre-election enmity, it is now quite clear that none of them – Donald Trump nor the Silicon Valley bigwigs – can ignore each other. For the sake of smooth running of their businesses as well as the U.S. economy, a “common ground” is necessary as observed by the Cowen & Co. analyst Paul Gallant.
Corporate tax reform that has been blatantly advocated by the President-elect since early days of his campaign is an issue that can bring technology leaders and Donald Trump to a truce.
Per data from Moody’s Investors Service Apple, Microsoft, Alphabet, Cisco and Oracle together made up almost 30% ($504 billion) of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015. According to figures from the WSJ: “Apple alone holds about 91% of its $237.6 billion in cash offshore.”
Notably, the U.S. government currently levies a 35% tax rate on repatriated cash, which Trump has promised to lower to 15%. An ideal restructuring of tax rates will enable companies like Apple to bring back a major part of their offshore cash to the U.S.
Will Technology Stocks Rebound?
Since Donald Trump’s selection (Nov 9), we note that the Zacks Computer & Technology industry has returned a modest 2.12% as compared with S&P 500 Composite’s gain of 4.22%. However, we believe that the upcoming meet will ease out some of those concerns that will eventually help the stocks to rebound.
We use our VGM Score to track technology stocks that shows characteristics to outperform the broader market. Our research shows that stocks with a VGM Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential.
Here we pick five stocks that have a favorable combination of VGM score of ‘A’ and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Moreover, these stocks have returns of more than 15% since the election of Donald Trump.
Our Picks
Santa Clara, CA-based Applied Materials Inc. (AMAT - Free Report) is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. Its earnings estimate for the current year has increased by 13 cents (5.7%) to $2.40 per share in the last 30 days.
Since Nov 9, Applied Materials has gained a massive 258.09%.
APPLD MATLS INC Price
APPLD MATLS INC Price | APPLD MATLS INC Quote
Headquartered at Simpsonville, SC, KEMET Corp. (KEM - Free Report) is the world's largest manufacturer of solid tantalum capacitors and one of the world's largest manufacturers of multilayer ceramic capacitors. Its earnings estimate for the current year has remained steady at 29 cents in the last 30 days.
The stock has returned a strong 63.68% since Nov 9.
KEMET CORP Price
KEMET CORP Price | KEMET CORP Quote
KVH Industries Inc. (KVHI - Free Report) is a leading manufacturer of solutions that provide global high-speed Internet, television and voice services via satellite to mobile users at sea and on land. Headquartered in Middletown, RI, the company has active operations in Denmark, Hong Kong, the State of Illinois, Japan, Norway, Singapore, and UK.
KVH’s earnings estimate for the current year has remained steady at 30 cents in the last 30 days. The stock has surged 33.53% since Nov 9.
KVH INDUSTRIES Price
KVH INDUSTRIES Price | KVH INDUSTRIES Quote
Jasper IN-based Kimball Electronics Inc. (KE - Free Report) operates as a contract manufacturer of durable goods electronics. The company has manufacturing operations primarily in the U.S., Mexico, Thailand, Poland and China. Its earnings estimate for the current year has remained steady at 93 cents per share in the last 30 days.
Since Nov 9, the stock has gained 15.41%.
KIMBALL ELECTRN Price
KIMBALL ELECTRN Price | KIMBALL ELECTRN Quote
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>