The Tech Bear Market: Perusing The Carnage
To give you a sense of just how ugly things have been this year, in case you need a reminder, I did a little screen on Morningstar.com looking at stocks with a market cap of at least $500 million that have dropped 40% or more since the end of 2007. It’s actually a pretty long list: 76 names. (And I believe the screener is only through yesterday’s close.)
There are plenty of tech names on the list, plus a wide assortment of solar stocks. Here’s a partial list, with tech names first, then solar stocks second, ranked by year-to-date declines. (In the interest of reducing the tedium, I’ve not provided links to the stock quotes here.)
Battered tech:
- Tessera (TSRA): -62%
- Sigma Designs (SIGM): -62%
- Nortel (NT): -55%
- RF Micro (RFMD): -52%
- Synchronoss (SNCR): -50%
- DealerTrak (TRAK): -49%
- NetSuite: (N): -48%
- MercadoLibre (MELI): -48%
- FormFactor (FORM): -45%
- Netgear (NTGR): -44%
- Cypress Semiconductor (CY): -43%
- Brightpoint (CELL): -43%
- Sonus (SONS): -42%
- Nvidia (NVDA): -42%
- Blue Nile (NILE): -41%
- Level 3 (LVLT): -41%
Battered solar:
- Solarfun (SOLF): -68%
- Suntech (STP): -59%
- Yingli Green Energy (YGE): -57%
- Evergreen Solar (ESLR): -51%
- SunPower (SPWR): -51%
- LDK Solar (LDK): -46%
- Trina Solar (TSL): -41%
Still I do not find any of them a bargain or worthy investing. STP, for example, is still traded at a p/e(’08) of 20. Although it is profitable, it can not generate free cash and has to issue more convertibles. Also do you see any memory chip companies that thrive? Solar chips are destined to be just like them as capacity keeps expanding relentlessly. I like alternative energy, but I could not find a way to implement a profit-making investment strategy now. STP is used only as an example here. SIGM is another flawed one and was promoted by the infamous person. Not to mention LVLT.
Before today’s market plunge,; I was counting the days after the big rally this week looking for a “McNeil Follow Through Day”. Does anyone know if todays rout negates this weeks rally in terms of this principle? The prior lows held and were not taken out. For those who don’t know this concept: A McNeil Follow Through Day occurs 4-10 days after a rally ( of 1.75% or greater) when the market has already made a significant low. The Follow Through Day consists of another rally making a higher high than the first rally day. All bull markets begin with such a follow through day, but not all follow through days result in a new bull market. Of course, non-technically speaking things are pretty dire out there. Any experts out there?
Each to his own, but I can’t seee the rationale of I-Love–Your -Blog, when he says he can’t find any bargains among the solar stocks. TSL is trading at 2009 PE of about 8 and with earnings expected to jump from $1.46 to $2.92 this year and about $4 next year.
That is about 10 time this years expected earnings with TSL trading near $30.
Sales are expected to be up 130% this year and 50% next year. The PEG is .35
LDK is trading at 15 times this years estimate and about 7 times next year’s eps.
Sales were doubled last and will double again this year, and are expected to be up 50% next year. PEG is .13
LDk is not a solar chip company, they make wafers, which are in huge demand.
Trina solar is not just a solar cell maker and is moving toward complete vertical integration. There are too many competing solar technologies to call it a commodity market. And the companies vary in the vertical integration or lack thereof.
Keep dreaming!!!Get a life and stop posting your worthless comments…..
I agree about I-Love_Your-Blog as he clearly talks through his butt. TSL is mega cheap and it will bounce in an explosive manner when the markets stabalize….. TSL’s foward pe is 7ish and their growth is breath taking. Dems taking the house, sky high energy prices, coming grid parity, and the globe going green says now is the time…. You will always have the fools trying to convinve others to buy bargains……..
i love your blog- your not a finace major are you!!!!
Thin film solar is going to take a huge hit to profit margins in the next two years.
Short first solar
How about Level3 ? What the hell is up with this pig? I bought 5,000 shares @ $6.20. OUCH
Level3 is probably going to go bankrupt.
Dave — I feel your pain regarding Level 3 (LVLT). I had owned stock in its predecessor company (Corvis, later known as Broadwing) since 2000. I was an employee there when I first bought the stock. I then watched it lose value steadily over the years. Ultimately they merged with Level 3 last year. Since then the price has gone down even further (taking into account merger adjustments). I finally capitulated in December when Level 3 was $3.50/share. Let’s just say I lost a ton of money despite holding this stock for several years. I had even doubled-down in ‘02-’03 and kept trying to wait it out. Personally, I’ll never again believe when someone says (about ANY company’s stock price), “It can’t possibly go much lower!”. Uh, well, it CAN go pretty darn close to zero…
Bankrupt, Should i just sell the stock and move on. Isn’t Broadband the future?
I hear that cartoon sound of an airplane diving into earth.
Level 3’s board want’s a reverse split on the stock. Is that good or bad?
MercadoLibre:Not worth Investing In ?Pls tell me why you wouldn’t Invest in the biggest growth E-Commerce Company in Latin America..
This is one of the best growth stocks out there…
LVLT still firing and employees still quitting. Roving managers coming in like hit men. I hate to see great people going through this. At least they’re taking the clients with them.
Another BSC idiot employee LOL
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
