By Hilary Kramer of InvestorPlace
We are now in the most interesting time of each quarter for stocks and the market: earnings season. Sure, earnings are always important, but this one is about as significant as it can get because the U.S. economy and stock market are at such a crossroads.
And at a time like this, technology is one of the most closely watched sectors because it is central to our economy. Corporations upgrading computer systems can add billions to the U.S. economy, and even a slight increase in consumer spending can result in dramatic new sales for the companies with the most innovative gadgets and personal electronics.
But it goes without saying that only those tech stocks on the cutting edge will benefit from this trend. To help you cash in, here are 5 tech game changers reporting this week that deserve a close look.
dominates the online retailing sector, and will continue doing so for the foreseeable future. Although the stock is a little pricey relative to its earnings, I am still attracted to its continued revenue growth, profitability, international footprint and piles of cash. Sales have grown sharply, even in the midst of the credit crisis of 2007 and 2008, and brought in $24.5 billion in sales in 2009.
AMZN's customer base has also grown. From the first quarter of 2007 through the first quarter of 2010, Amazon's number of active customers has grown from 65 million to a little over 110 million, while rival eBay has remained stationary at 85 million. Much of this growth is coming from overseas and as a result has upped its international sales results.
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AAPLhas excellent fundamentals and game changing catalysts built into its business model. These catalysts, of course, are its own famed products: the iPod, iPhone and now iPad. Though the stock has experienced a heady rise over the past few years -- and especially the past month -- Apple's price-to-earnings ratio holds up well against the S&P 500, and against its peers. I believe there is still room left for it to grow.
This case is only bolstered by Apple's recent breakout quarter. In its earnings report we learned Apple's net income increased 78% on record revenue fueled by demand for iPads and iPhones. It's $3.25 billion in profits obliterated expectations, proving that this tech giant is continually raising the bar for its products -- and investors.
Atheros Communications (ATHR)
Wireless networking chipmaker
has been red hot, and its most recent quarter not only blew away expectations, it blew away the competition as well. Revenue grew +11% and the stock crushed estimates for profits and sales benchmarks. The EPS forecast for ATHR was just 3 cents -- and it posted 67 cents! As a result of this, the stock has seen its share prices rise like crazy over the past year. Despite this, it remains attractively valued relative to its peers, and there should be room left for the stock to appreciate.
Stock improvement has been astonishing for Atheros, rising more than 140% in a year. Its fundamentals improved in every way imaginable. EPS, net income and margins are all in dramatically better shape than a year ago. Over the past 12 months, the firm's hit $670 million in sales, a capping of five years of steady top line growth -- an astonishing feat.
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is the preeminent chip maker for mobile phones in the world, in terms of the sheer size of its operations and in terms of sales. QCOM also has unparalleled leverage in the Telecom market do to its intellectual property rights of many aspects of Code Division Multiple Access (CDMA) technology.
QCOM's CDMA technology is required by any cell phone to access the ever more popular 3G network. As a result, cell phone makers like Verizon and Sprint pay QCOM an annual royalty, contributing handsomely to QCOM's top and bottom line growth. As the 3G network continues its global rollout, QCOM will benefit by selling more handset chips, netbook chips and by garnering more licensing revenues. And with the ever growing popularity of smartphones, Qualcomm looks poised for growth.
has been a Yellow Pages publisher most of its life, but it is now transforming itself into essentially an advertising agency for local small- to medium-sized businesses across the United States by providing a wealth of media advertising programs.
And here's a great kicker that allows us to follow some of the so-called "smart money." SPMD's largest shareholder is
. If you don't know his name, he is a highly regarded Wall Street investor who has made a fortune ($2.3 billion in 2009) being a contrarian and finding values that Wall Street either dismisses or hasn't discovered yet. I have a lot of respect for John and am very comfortable investing my money alongside his. Latest reports show that he owns over 17% of SPMD.
As of this writing, Hilary Kramer was recommending all five of these stocks to subscribers of her Game Changers newsletter.