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Scott Kessler, head of technology research at S&P Capital IQ, weighs in on the potential for a tech pullback in the markets and gives advice on h...
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-- the NASDAQ has been on a -- this year up 15% so far even with the pullback that we saw over the last week by name but my next guest says that there is more downside to come.
And he's got on ideas and how you can play a pullback in the tax tech sector.
Scott Kessler is ahead of technology equity research for -- and capital IQ Scott great to have you on and before we talk about earnings -- talk about this news that we got our that apple.
Involved enact antitrust lawsuit against some that major e-book publisher is out there is this sat and net net negative that will stop the ride.
That apple has seen in 2012.
While survived thanks for having me so to answer a question about -- I -- in two parts.
First we actually think that it is a pretty serious situation.
And -- You know if you look at the complaint and attachments.
The on the other hand however on notwithstanding those specifics but we don't think that the outcome of this lawsuit is gonna have much of an impact on the shares.
I'm backing out the success of that building is apple is it sort of it's -- it its own story -- more than 50% year to date.
It's getting grouped in with technology as a bucket -- -- apple for me and tell me the picture is Jess is Rosie.
When it doesn't include that giant.
I'd say no is the short answer.
We like apple we have a buy recommendation on the stock.
We are encouraged by the fact that the company recently announced that it was gonna be paying a dividend and buying back shares.
We see growth drivers as intact we see the valuation is attractive and we -- number of potential -- especially around on new -- introductions.
But in terms of other companies.
We think that in many cases sure I mean the economies around the world -- stabilize the strengthened.
But they're still big question mark coming out of Europe.
In China and so we recommend that people be a somewhat selective in -- technology stocks right now.
All right so let's look ahead to lead the next few weeks in and earning season because we know Google's really getting kicked things off for big cap -- Last earnings season we stock some signs yes -- ad market is there.
On the life and and the world has changed since last quarter we are seeing some signs that even Google starting to slow down -- -- expecting for the quarter.
Right so mean Google people are very very focused on the quarter.
Also because.
It's one of the first companies -- report in the technology sector but in addition and importantly on they don't provide guidance so really what you see is what you get.
Where we focus on revenues we're going to be focused on per share earnings but importantly we think a lot of people are really focus on.
What's going on terms of paid clicks.
And cost per click those are two data points that have come to the -- schools provide more details around those but to be totally frank.
Even at the company excuse tremendously while -- all those fronts the big overhang the big elephant in the room we think.
Is Motorola mobility and whether or not the companies can you give us any sense as to whether or not.
-- they're gonna be able close on that positioning times.
Absolutely every -- -- -- from some sports -- for -- some sort of decision -- any other means out there that you think are gonna be very telling about what the industry as a whole.
Is going to be doing this year any any names that will report they can -- you can tell us to -- Yes so three names that were recommending right now include -- Microsoft we have a buy recommendation on the stock we still think it's inexpensive and we see.
A really strong fox cycle for the company.
On also like the dividend there we like EMC.
It's a leader in storage hardware software and services a nice plan big deed also virtualization software with the majority stake.
In VMware and last but not least the smaller cap name Earthlink people know it from the 1990s as a leading Internet service provider but the reality is there's -- acquisitions over the last couple of years.
75%.
Of their business is actually business services they're doing everything from virtualization cloud computing data centers.
All the things that you want to see would be growth company.
I -- and got those name what's on my cheat sheet that will look out for them as a earnings season continues to roll on Scott Kessler S&P capital IQ thanks for being here.
Thank you.
