The Zacks Analyst Blog Highlights: Facebook, Teradyne, Google, Microsoft and Sony
CHICAGO, Dec. 17, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include theFacebook (Nasdaq:FB-Free Report), Teradyne (NYSE:TER-Free Report), Google (Nasdaq:GOOG-Free Report), Microsoft (Nasdaq:MSFT-Free Report) and Sony's (NYSE:SNE-Free Report).
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Here are highlights from Monday's Analyst Blog:
Technology Stock Roundup
Facebook's Meteoric Rise to the S&P 500
From Dec 20, Facebook (Nasdaq:FB-Free Report) will replace Teradyne (NYSE:TER-Free Report) in the S&P 500. The company took 19 months to join the index, roughly the same amount of time as Google (Nasdaq:GOOG-Free Report).
S&P has some criteria for adding a company to the index: it generally considers the company's profitability over the preceding four quarters, so Facebook's results over the past year were a primary consideration. However, it also considers market capitalization and sector weighting, so as to correctly represent the sector within the universe. So Facebook's soaring prices and the growing importance of social media as a sector also played a part in its inclusion.
The advantage for Facebook is obvious: there are around 1,300 mutual funds and 13 exchange traded funds following the S&P 500. All of these will need to increase their holdings of Facebook shares, which was the reason the company saw a surge in share prices. The enhanced liquidity that generally accompanies an inclusion in the index also supports higher prices and volumes.
Sony Nosing Ahead of Microsoft
Microsoft (Nasdaq:MSFT-Free Report) shares lost further ground last week as the Xbox manufacturer admitted that its gaming device took 18-20 days to touch 2 million units sold, slightly behind Sony's (NYSE:SNE-Free Report) PS4 which reached 2.1 million units in 15-16 days.
Microsoft needed to make a splash early on because its devices and services strategy is not going that well and there appear to be multiple challenges ahead for many of its businesses. So investors reacted strongly to the news that Microsoft had fallen behind. Microsoft of course pointed out that there were no unsold items at any of its retail outlets and any shortage was on account of its inability to meet demand.
There might be some truth to this because both Microsoft and Sony appear to have moved cautiously in terms of production (Sony was out of stock earlier). This may be because Nintendo's Wii U didn't do very well last year, with sales dropping off sharply post launch and ultimately missing the company's expectations.
Also, investors appear to have been unduly harsh because one can hardly rule out the fact that Microsoft's device is $100 more expensive and the device faced plenty of criticism. Initial shipments are in fact more about sentiment than ultimate market position because it's only in latter that platform switches become apparent. In that respect, Microsoft's Xbox One appears to be offering more.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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