The stock market has been dropping and the volatility has been extreme with the Dow Jones Index seeing triple digit moves up and down almost every day for the past couple of weeks. The economic news is not positive and European debt issues are causing many investors to compare the current environment to 2008 and worry about another Lehman-like collapse of a European bank. This has made defensive and stable investments far more attractive than risky assets. It has also made gold look like a safe haven. However, there are a few tech stocks that are shaping up to be safe havens that might even outperform gold in the long run with less volatility. Gold has seen some days where it drops $40 or even $50+ dollars in a single day. These stocks have been acting very strong lately, somewhat as "hard assets." This is because these companies have strong product demand, growth potential, and great management. Some even have substantial dividends and massive amounts of cash on the balance sheet. I think it makes sense to consider some of the stocks because they could easily outperform gold, while offering safety and stability as well:
Intel Corporation (NASDAQ:INTC) is a leading maker of chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. This stock has been acting very strong for the last few weeks in spite of a very weak market. Even on the worst days for the market, Intel shares have remained unwilling to drop much below the $19 level. The strong dividend yield of 4.2% helps to keep this stock stable and in demand even on very bad market days, that's why it's probably a better safe haven than gold. Plus, there is some profit growth potential.
Here are some key points for INTC:
- Current share price: $19.70
- The 52 week range is $17.84 to $23.96
- Earnings estimates for 2011: $2.36 per share
- Earnings estimates for 2012: $2.47 per share
- Annual dividend: 84 cents per share which yields 4.2%
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading networking hardware company. Cisco's CEO, John Chambers has begun to restructure the company. This restructuring includes layoffs and a streamlining of business operations which should lead to higher profit margins and a rising stock price. Cisco had been a very weak stock up until a few weeks ago, but lately the stock has been strong and even less volatile than gold on many days. Cisco is now acting like a "hard asset" and is unlikely to see a big drop from current levels.
Here are some key points for CSCO:
- Current share price: $15.82
- The 52 week range is $13.30 to $24.60
- Earnings estimates for 2011: $1.70 per share
- Earnings estimates for 2012: $1.89 per share
- Annual dividend: 24 cents per share which yields 1.5%
Google, Inc. (NASDAQ:GOOG) offers a wide variety of online products and services ranging from advertising online to email, maps, and more. Google has been one of the leading innovators in the Internet sector and that should continue. Google has a cash-rich balance sheet and very smart management, this should lead to more growth and innovation in the future. Google continues to pursue high growth opportunities and just announced a deal to buy Zagat (restaurant guides). This deal is expected to help Google compete with companies like Open Table (NASDAQ:OPEN) and Yelp.com.
Here are some key points for GOOG:
- Current share price: $524.85
- The 52 week range is $473.02 to $642.96
- Earnings estimates for 2011: $35.45
- Earnings estimates for 2012: $42.02
- Annual dividend: none
Apple Computer, Inc. (NASDAQ:AAPL) is a maker of the popular iPhone, iPad, Mac computer and more. This company appears to be pure genius with Steve Jobs at the helm. This stock is likely to be a great long term investment on any dips. Consumer demand remains strong for almost every product made by Apple, and a correction or recession is not likely to hold this stock back for too long. Apple stores are the only stores that I see full of people every time I go. This company is likely to continue taking more market share from other companies and widening its user base. Apple shares have been less volatile than gold lately and Apple can grow profits each year.
Here are some key points for AAPL:
- Current share price: $377.48
- The 52 week range is $261.40 to $404.50
- Earnings estimates for 2011: $27.49 per share
- Earnings estimates for 2012: $32.29 per share
Qualcomm Inc., (NASDAQ:QCOM) is a leading maker of integrated circuits for mobile phones. This stock is already bouncing off recent lows of about $47 per share and has remained strong even on days when the markets are seeing large declines. This company sells to some of the leading mobile phone makers and that business is expected to remain strong globally. This stock offers a dividend plus strong growth potential.
Here are some key points for QCOM:
- Current share price: $50.40
- The 52 week range is $40.07 to $59.84
- Earnings estimates for 2011: $3.19 per share
- Earnings estimates for 2012: $3.49 per share
- Annual dividend: 86 cents per share which yields 1.7%
Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.
Disclosure: I am long CSCO.