Ed Yardeni: Overweight Computer Hardware Stocks
Ed Yardeni, president and chief investment strategist at Yardeni Research, a highly regarded economist and stock markt analyst recommends buying computer hardware stocks.
In his daily briefing Thursday he wrote: "The stock price index for overweight rated Computer Hardware industry has surged 17.2% ytd to a record high after rising 17.5% in 2010. Forward earnings rose 1.3% m/m in July to a record high, and has risen in 22 of the past 23 months.
"Analysts expect annual earnings growth of 40.2% in 2011 and 12.7% in 2012 after surging 63.8% higher in 2010. The industry is trading at a relatively low 14% discount to the market’s P/E as valuation rose to 10.7 from a 26-month low of 10.0 in June.
"The profit margin is getting a bigger boost from Apple now, and rose to a record high of 12.5% in Q1 from 12.0%. Imports have soared since mid-2009 and is well above exports, and both are in rising trends lately. Capacity utilization steady at 79.4% in June, and among the highest readings of the past 40 years."
Apple(AAPL), Transact(TACT), Synaptics(SYNA) and Dell(DELL) have the best earnings growth in this industry, according to IBD's EPS rating system. AAPL, TACT, and DELL are moving up in strong uptrends.
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In his daily briefing Thursday he wrote: "The stock price index for overweight rated Computer Hardware industry has surged 17.2% ytd to a record high after rising 17.5% in 2010. Forward earnings rose 1.3% m/m in July to a record high, and has risen in 22 of the past 23 months.
"Analysts expect annual earnings growth of 40.2% in 2011 and 12.7% in 2012 after surging 63.8% higher in 2010. The industry is trading at a relatively low 14% discount to the market’s P/E as valuation rose to 10.7 from a 26-month low of 10.0 in June.
"The profit margin is getting a bigger boost from Apple now, and rose to a record high of 12.5% in Q1 from 12.0%. Imports have soared since mid-2009 and is well above exports, and both are in rising trends lately. Capacity utilization steady at 79.4% in June, and among the highest readings of the past 40 years."
Apple(AAPL), Transact(TACT), Synaptics(SYNA) and Dell(DELL) have the best earnings growth in this industry, according to IBD's EPS rating system. AAPL, TACT, and DELL are moving up in strong uptrends.
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