- Summer is unofficially over.
- September could be a key month for the markets.
- Here are five major tech stocks to watch this month.
Now that we've passed Labor Day, the unofficial end to summer is here. That means that it is back to school and work for many, and it should mean that the markets will get a bit busier in the coming weeks. The month of September will certainly be a busy one. As someone who is a leading contributor when it comes to the technology space, I've found five tech names that I'll be watching closely in September. Today, I'll discuss why these names must be followed this month.
Apple doesn't make the list just because it is the largest name and carries the most weight. The company is expected to unveil its new line of iPhones this month, which will be the major driver of fiscal 2015 revenues and earnings. The current expectation is that Apple will unveil these new phones on September 9th, with them being available to the public on September 19th. This would allow a little more than a week's worth of sales in the current fiscal Q4 period, which would fit in with what Apple has done in recent years.
When it comes to the iPhone 6, we are expecting two larger screen models. One major question asked is whether or not certain models will feature sapphire glass, which is certainly important for GT Advanced Technologies (GTAT). Additionally, it will be interesting to see if Apple can charge higher prices for these larger screen models. The iPhone 6 is the most anticipated new product for Apple in years, and it is expected to help the company approach or exceed $200 billion in fiscal year revenues. September's expected launch will be watched as we enter the busy holiday season. Investors will also be looking to see if Apple launches any other products on the 9th.
The Canadian device and service company is scheduled to report earnings on September 26th. We know that the company is still undergoing a transitional period, and that means that year over year revenue numbers will not look pretty. At the moment, analysts are looking for a roughly 40% drop in fiscal Q2 revenues to $943 million. On the flip side, the adjusted loss is expected to improve to $0.16 a share from $0.47 in the prior year period.
BlackBerry has had sizable bottom line beats in its past two quarters, so that will be something to watch. Additionally, the company's cash position will be scrutinized heavily, to see how much cash the company burned through in the quarter. This name is constantly discussed as a major turnaround candidate, and CEO John Chen is working to get the company back on track. While we won't see results anywhere close to where they were a few years ago, we might be able to see increasing revenues and an adjusted profit in the next year or two. For now, short sellers have left this name in bunches, but it is time for the company to get results back on track.
Sometimes, it's not all about earnings or product releases. In Microsoft's case, I've highlighted the name due to a potential dividend raise this month. Probably in the third week of September, the company will declare its next dividend. Given that the $0.28 per share rate has been paid four times, investors are expecting this next dividend declaration to be a raise. Microsoft's balance sheet is in good shape, although a large share of the company's cash is located outside the United States. In the above linked article, I lowered the lower end of my prediction range for Microsoft's dividend raise. I did this because US large cap tech names have recently shown a preference for stock buybacks. As a result, I think more cash will be used for share repurchases, and thus the dividend raise might not be as much as some will hope. I still think that the dividend goes to $0.31 or $0.32 a quarter, which will be a nice raise for investors.
Another name that will be reporting earnings during the middle of September, Oracle will be one of the largest names reporting during the month. Current estimates call for 4.7% revenue growth to $8.77 billion, while non-GAAP earnings per share are forecast to rise by a nickel to $0.64. When it comes to software and IT spending, Oracle may be one of the most important names out there. With the company also making a strong push into cloud computing, investors will be wanting an update on that space. Oracle shares tumbled after its prior earnings report as the company missed on both the top and bottom lines. Since then, shares have recovered a bit, putting them within reach of their 52-week high. If the company has a better report this time around, it will be interesting to see if shares can reach that high point.
This one is perhaps the only name that makes it because of another name. Yahoo is on the list because it appears that the Alibaba (Pending:BABA) IPO could happen in mid-September. We could get an IPO price range sometime next week, and shares could begin trading in the next couple of weeks. Yahoo will receive quite a windfall from the Alibaba IPO, although a recent agreement has cut the number of shares Yahoo is required to sell in the offering. That could be beneficial for Yahoo shareholders if Alibaba shares rocket higher once they start trading. With Yahoo's results continuing to disappoint, the company is approaching a critical junction. Yahoo will return a large amount of cash to shareholders after the IPO, which at the least will go to the buyback that's helping to get the share count down. If Alibaba starts trading in September, Yahoo will definitely be one name to watch.
During the month of September, these five names will be stocks to watch. Apple is expected to launch the iPhone 6 in about a week, with the potential for another large announcement to come. BlackBerry and Oracle both will report earnings during the month, while Microsoft is expected to raise its dividend. Yahoo will get a huge cash infusion if Alibaba does in fact go public. There is a lot of excitement building in tech land, and these names will highlight the month.
Additional disclosure: Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.