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The sixth week of trading officially ended Friday with some disappointment. Unlike the prior weeks since the New Year, this week, many of the broader indices lost ground instead of gaining. This reality has caused many investors to wonder if the so called "January effect" that had extended in February is about to come to an end.

Friday brought some profit taking as several of the indices ended lower. It appears that investors seemed undecided which course to take and how to digest the news that the U.S. economy grew more slowly than expected in the last three months, as well as the never ending concerns surrounding Greece. But I think it was the downgrade of nearly three dozen Italian banks that really caused the "slight pause" in the market, as investors started to appreciate the potential magnitude of this event. This is even though it seemed earlier in the week that progress was being made toward an agreement.

As disappointing as all of this seems, along with the fact that U.S. seems to lack some autonomy of its own, I think investors should take solace and continue to feel optimism in the fact that our economy continues to grow and our equity markets are very much alive. The good news is also that the Fed got in on the action and assured investors that short term interest rates will be kept as close to zero as possible at least until the end of 2014. This may or may not be enough to sustain the current momentum, but it certainly can't hurt.

As disappointing as it is to see the indices down on Friday, it is not a surprise, as I think profit taking at this juncture is indeed the right thing to do, considering that the S&P500 is up 7 percent for the year. So a pullback has to be just around the corner. I'm sure that I am not the first to say this, but the market does indeed appear overbought, and there are several candidates showing such signs that have made some headlines this week.

Apple (NASDAQ:AAPL)

With Apple's highly anticipated earnings announcement now out of the picture, at least in terms of an event to look forward to, investors are now counting down to when the stock hits that magical number of $500. Like making history, everyone will want to remember where they were and what they were doing when it occurred. The question that I'm curious to have answered is: What happens after that? As great as it will be to see the $500 print along as it passes along the ticker scroll, I'm growing more curious to know what is going to be the company's next move - specifically with its 100 billion worth of cash.

Where I once suggested that any price under $500 for Apple is cheap, I am now revising this figure to any number under $550. The company just prints money, and does so faster than the U.S. Treasury. All Apple needs to do is achieve roughly 12% to 15% annual revenue growth for the next couple of years, and the company will be able to generate almost $180 billion in annual revenue. Just imagine what that means for a second. Assuming a declining ratio of free cash flow conversion, Apple could end 2015 with nearly $39 billion in free cash flow. Assuming 6% cash flow growth beyond that, a market-matching discount rate, and adding in the cash on the balance sheet, suggests a target of at least $650.

Sirius XM (NASDAQ:SIRI)

Last Thursday, the satellite radio giant reported earnings that arrived "mixed." I suppose for the foreseeable future, "mixed" is the way it should be described depending on through which lens its numbers are scrutinized. To the bulls, the numbers were great. However, to the bears, they were anything but respectable. But regardless of who you chose to believe, it is fair to say that nobody's mind is going to change any time soon.

For me, I can only say that it was very disappointing to the extent that I have demanded answers from the company to 8 things that I felt were neglected during the conference call. I have recently placed inquiries in the form of letters to investor relations for the following:

  1. I've recently requested additional information regarding Lynx and its sales projections over the next several quarters.
  2. I've inquired about the lack of marketing regarding the product as well as the fact that Sirius no longer appear on TV commercials.
  3. I've inquired about the robust sales projections from auto makers such as Ford and GM and wanted to know why Sirius sub forecast did not jive with that of its partners relative to its average rate of conversion over the past three years.
  4. I've inquired about the growth of the CPO market and the fact that it was not discussed much during the call nor via the Q&A session that followed - particularly with the announcement regarding AutoNation.
  5. I've inquired about action being taken to retain the approximately 1 million subscribers that cancel each year. I've also asked about the progress of its partnership with SuccessFactors in improving retention rates.
  6. I've also asked about the continuing notion that Sirius gives its products away for free for long periods of time without requesting that the sub pays for it.
  7. I've asked why did Sirius invest so heavily in the Lynx hardware and only released it 30 days after the holiday season had lapsed.
  8. I asked why did it invest in the piece of hardware to begin with when it could have created an app that does essentially the same thing while eliminating the $300 cost?

My suggestion is, if investors collectively did all of this, it would light a fire under the company to address these concerns instead of accepting "it is what it is."

I think Sirius will eventually break $2.18 with confidence, and then trend higher, because my target remains $2.50. But in the near term, absent some sort of anomaly, it will unlikely happen until the company raises guidance and give Wall Street what it wants by hitting major league home runs in major league parks. Simply put, Sirius needs to raise its own level of expectations and it can start by addressing some of the points above.

Bank of America (NYSE:BAC)

With Bank of America now having hit $8, a few analysts have now come to suggest that it can possibly hit $30 in four years. In a recent article noted BofA bull Dick Bove suggested that the troubled bank should be able to hit $30. As shocking as that may sound, I don't think that it is out of the realm of possibility. On the heels of having issued my own price prediction of $10, I am now inclined to consider revising that target and think that it is perhaps a tad too conservative - but not because of Mr. Bove's suggestion, but for the simple fact that the stock is now only $2 away and shows no signs of slowing down. In the article citing an interview by Mr. Bove, he was quoted as saying the following:

I think there's $3 in earnings power there and this stock can easily sell at 10 times earnings, once you recognize that the company is two companies: its Countrywide and its Bank of America and once you get Countrywide taken out of Bank of America, which is the lawsuits are paid, the bad loans are paid the foreclosures are done, all of a sudden Bank of America is there and Bank of America can earn three bucks.

The value of its debt is soaring at the present moment. In the third quarter of 2011, the company was being attacked on the basis that it could be run out of business similar to a Lehman Brothers or a Bear Stearns, and the value of its debt fell dramatically.

I have to agree with this assessment ,and it seems as evident by Bank of America's performance year to date, the market is in agreement as well. However, reaching $30 is a bit of a tall task. The question is, do the fundamentals support that valuation?

Cisco (NASDAQ:CSCO)

Last Wednesday, the company reported earnings that beat Wall Street estimates for the third consecutive quarter. It was precisely this anticipation that prompted me to suggest that the stock was on its way to $30. Cisco reported net income that climbed 44%. In the fiscal second quarter, which ended January 28, net income arrived at $2.2 billion, or 40 cents per share - this compares with earnings of $1.5 billion, or 27 cents per share year-over-year. If you factor out that the costs associated with stock-based compensation as well as some acquisition-related amortization, the company actually earned 47 cents per share - 4 cents per share above analysts' expectations based on polled by FactSet. Revenue was $11.5 billion, up 11% from $10.4 billion a year ago and compares favorably to the $11.2 that was projected.

The bottom line is, technology is once again a safe place to invest at the moment. If you want to break it down a bit further, in networking it continues to be Cisco and everyone else. Considering where the stock has risen from, I continue to think that the downside risk is very limited with respect to the cash and other strong fundamentals of the company. Its forward P/E is right at 10 and (to me) that implies a safer earnings risk when compared with several of its peers - namely Juniper (NYSE:JNPR), which might be a tad more vulnerable due to its high P/E and also the fact that Cisco has shown that it is becoming more aggressive in terms of market share and pricing.

Clearly the company is not out of the woods just yet. There are still challenges that lie ahead, but I now have several reasons to expect a continued rise not only in the company's execution but also in its share price. Even on the most bearish assumptions, this stock should easily approach the $25 mark before the end of Q2 and $30 by the end of the year.

Oracle (NYSE:ORCL)

On Thursday database giant Oracle when shopping again with its acquisition of Taleo, the human resources software maker for $1.9 billion dollars and is expected to close mid 2012. As noted in the article. I say "again" because the company, only a few months ago acquired RightNow, the cloud-based customer experience suite designed to help organizations deliver customer experiences across the web and social networks. As far as the deal for Taleo:

The deal suggests the industry's recent buying streak for Web-based software, commonly referred to as cloud computing, is continuing; however, the mild 18% premium over Wednesday's close raises questions about what tech giants are willing to pay for cloud-based software.

For Oracle, investors were met with disappointment during certain parts of last year as the stock trended down, I think Wall Street overlooked the fact that Oracle had already anticipated weakness in certain segments of its business and has positioned itself for the technological shift within the cloud that will allow it to maintain its dominance in the corporate enterprise sector. Yet, it would seem that the market developed a bit of anxiety over its earnings and the likelihood that a rebound in IT spending was less possible in 2012. But for Oracle, other streams of revenue and growth have always been par for the course.

As the cloud continues to consolidate Oracle will remain one of the top players within the space as well as the enterprise. But I can't help but speculate on other possible M&A candidates that are out there - a company such as Kenexa, smaller unknown cloud-based names has to be on the radar and opportunistic investors may look to enter the position in anticipation that a buyer may emerge.

Disclosure: I am long BAC, CSCO, ORCL.

Source: 5 Headline-Making Stocks Poised To Move