The all-time high in the Nasdaq following the U.S. election is lifting all tech stocks. Investors should differentiate between strong companies and those along for the ride.
Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) are examples of strong companies. These are good core holdings. Conversely, Himax Technologies (NASDAQ:HIMX), which gained 43% last week, now trades at highly unfavorable valuations. The company posted another strong quarter. In Q3, its gross margin expanded, while revenue rose by 46.1%. At a non-GAAP EPS of seven cents, the stock’s forward P/E of nearly 30 times is unfavorable.
BlackBerry (NYSE:BB), which is getting close to its yearly high, offers no revenue growth prospects. In its Q4, it posted revenue increasing by 2%, to $266 million. Investors should sell BB stock to book the short-lived gains.
Sierra Wireless (NASDAQ:SWIR) posted no news recently. The stock trended in the $10-$11 range for months before closing at $15 last week. In Q3, it posted revenue growing by 3.6% to $180.3 million. Investors may wait for the stock to top $20 before selling. Its sale of the automotive product line will simplify the business structure.
SWIR is improving its operating efficiency. Cost reductions will help its bottom line but may hurt its growth.
