All Those Tech Stocks You Hated? They're Booming Now
Published:
Monday, 26 Nov 2012 | 1:44 PM ET
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While
the stock market has spent the last month in the doldrums, a few of the
least respected tech and internet companies have seen their stock soar.
All the stocks the experts told you to hate are doing well.
Take Research in Motion [RIMM
11.98
0.32
(+2.74%)
]. For most of the year, RIM was a dog of an investment. At least one activist investor wondered aloud whether RIM could survive on its own. And then everything changed.
0.32
(+2.74%)
]. For most of the year, RIM was a dog of an investment. At least one activist investor wondered aloud whether RIM could survive on its own. And then everything changed.
The
rally in RIM, which really started after the company reported better
than expected results at the end of the quarter, has been absolutely
gob-smacking. Over the past month, the stock is up more than 53 percent.
The stock opened sharply higher on Friday and gapped higher again on Monday after an analyst at Jefferies said that the new Blackberry had a 20 to 30 percent chance of success and the company could avoid a "worst case scenario."
When
you are as despised as RIM, sometimes that's all it takes to give your
stock a boost. National Bank Financial analyst Kris Thompson raised his
price target on the stock Monday. (See, also: Is Now the Time To Buy RIM?)
Facebook [FB
25.94
1.942
(+8.09%)
] is another company that looked like a disaster for investors. But then, earlier this month, something quite odd happened.
1.942
(+8.09%)
] is another company that looked like a disaster for investors. But then, earlier this month, something quite odd happened.
Instead of selling off as the post-IPO lockups expired,
Facebook rallied hard. And since then it has been on a stunning tear.
The stock is up more than 18 percent over the last month. Today alone
it’s up 8 percent.
Today's
rally was likely aided along by Bernstein Research analyst Carlos
Kirjner, who had been very bearish on the company. Now he says he
expects the stock to outperform the Standard & Poor's 500-stock
index over the next year.
Yahoo [YHOO
18.755
0.185
(+1%)
]
began climbing at the end of August—it’s up over 25 percent over the
last three months, while the NASDAQ has declined by more than 3
percent. Today Goldman Sachs analyst Heath Terry added Yahoo to the
firm's "conviction buy" list. The stock is up more than 1 percent
today. (By the way, check out Jim Cramer's prescient call on Yahoo's upside.)
0.185
(+1%)
]
began climbing at the end of August—it’s up over 25 percent over the
last three months, while the NASDAQ has declined by more than 3
percent. Today Goldman Sachs analyst Heath Terry added Yahoo to the
firm's "conviction buy" list. The stock is up more than 1 percent
today. (By the way, check out Jim Cramer's prescient call on Yahoo's upside.)
Zynga [ZNGA
2.40
0.08
(+3.45%)
]
is the latest entrant into the rally in hated tech stocks. Although it
hadn’t done much for most of November, today it has risen more than 4
percent.
0.08
(+3.45%)
]
is the latest entrant into the rally in hated tech stocks. Although it
hadn’t done much for most of November, today it has risen more than 4
percent. 
For
an explanation of what’s going on with this market, I turned to Matt
Gohd, senior managing director at WallachBeth Capital. Gohd, you might
recall, successfully called the contrarian turn in Facebook earlier this month.
When
stocks are so widely despised, often it takes just a bit of good news
to give them significant boosts. A good analyst report. An earnings
report that isn’t catastrophic. Even anecdotal evidence about holiday
sales.
“Find a group of stocks that everyone hates, that are down significantly, and buy them,” Gohd advises.
His
current favorite is Zynga, which he thinks has a potential upside of 50
percent. While he doesn't personally own the stock, he recommends it
and trades in it for hedge fund clients.
Follow John on Twitter. (Market and financial news, adventures in New York City, plus whatever is on his mind.) You can email him at john.carney@nbcuni.com.
© 2012 CNBC.com
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