'Mad Money' Picks: 6 Tech Buys And 3 Sells

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 |  Includes: AAPL, BBRY, CRM, DVMT, LF, NTAP, PAYX, TIBX
by: Chris Lau

The S&P (NYSEARCA:SPY) ended the first quarter of 2012 with returns not seen since 1998. The index was helped by the absence of any negative economic data, lower trading volume, and a lack of any bad news from Europe. The markets found leadership during the quarter, with Apple, Inc. (AAPL) accounting for around 10% of the S&P's rise.

The glittering returns in the market did not go unnoticed by analysts or by CNBC Mad Money's Jim Cramer. Last week, Cramer's technology stock picks net bullish. He was bullish on 6 of the 9 stocks mentioned:

Name

Avg Vol

Call

Date

NetApp, Inc. (NASDAQ:NTAP)

7,283,310

Sell

3/30/2012

Research In Motion Limited (RIMM)

21,064,800

Sell

3/30/2012

IBM

4,471,570

Buy

3/29/2012

Paychex, Inc. (NASDAQ:PAYX)

2,668,010

Buy

3/29/2012

TIBCO Software Inc. (NASDAQ:TIBX)

2,304,630

Buy

3/29/2012

salesforce.com, inc (NYSE:CRM)

2,655,480

Buy

3/29/2012

EMC Corporation (EMC)

20,817,400

Buy

3/29/2012

Apple Inc.

18,977,200

Buy

3/28/2012

LeapFrog Enterprises Inc. (NYSE:LF)

797,381

Sell

3/27/2012

Click to enlarge

If stocks face a pull-back in the second quarter, which technology stocks should investors be considering?

Research in Motion, which Cramer said was a "sell," reported a loss for the first time since 2005, and closed at $14.70, up 7.06%. Shares rose despite an inventory charge of $267M for BlackBerry 7 devices. RIM saw weak sales for its premium device, and reliance on unit sales strength for its lower-margin Curve product during the quarter.

During its conference call, some investors incorrectly interpreted that RIM was open to licensing its operating system to hardware makers. What RIM said was that it was looking to:

evaluate ways to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives. This will include a strategic review to identify these and other opportunities to drive stakeholder value.

Media also thought that the company was exiting the consumer market. The company was simply recognizing that it lost focus in the corporate market. Heins, RIM's CEO, was referring to the launch of Blackberry Mobile Fusion software. Cramer was bullish on Paychex justifying the positive sentiment by its 4% dividend. Analysts also collectively raised the target price for Paychex by an average 3.25% to $32.27. In its conference call, the company said that its checks per payroll improved by 1.8%. This is its 8 consecutive quarterly increase. Paychex did forecast a more moderate checks per payroll metric for the remainder of 2012.

In the software space, Cramer liked Tibco Software. Tibco recently said that it would buy back $300M in shares. Tibco has $350M in cash, and bought back a total of nearly $1B in shares over a 6-year period. During its conference call, the company provided an outlook that matched consensus. The company said it expected a revenue of $240M - $244M and earnings per share of between $0.22 and $0.23.

Cramer ranked Salesforce.com a "buy." Investors should be cautious with CRM. There were no insiders purchases in Salesforce.com over the last 2 years. Insiders sold $80.85M in shares in the last 12 months. Shares closed at $154.51, just 3.5% below its 52-week high.

In the cloud storage space, Cramer liked EMC Corporation. EMC is another technology stock trading at a 52-week high. Investors should be aware that there is large bearish position on the company. Short interest was 51.42M shares on March 15. Share price may also have increased due to short-covering. Between February 29 and March 15, short interest declined by almost 50% from 100.41M shares. EMC is scheduled to report earnings on April 10 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.