Read the companion article from TheStreet.com: Will Tech Carry the Market on Its Back in 2012?
TOM HUDSON: The year has gotten off to a pretty good start for
shareholders, but one stock index outpaces the gains elsewhere — the NASDAQ Composite. That brings us to tonight`s “Word on the Street,” —
technology. Jill Malandrino is back with us. She`s with thestreet.com.
Jill, it`s always nice to see you. Year-to-date the NASDAQ up more than 8
percent, information technology sector up 7 percent. Can tech carry the
rest of the year?
JILL MALANDRINO, OPTIONSPROFITS, THESTREET.COM: I absolutely think it
can. And I think what investors don`t realize, look at the S&P for example.
It`s up 4.5 percent for the year. No one really can identify why. It`s
been choppy, unconstructive trading but what investors don`t realize is
that the tech sector comprises over 16 percent of the S&P. And that`s where
that true nice healthy support is coming from. Because these tech
companies, the identifiable trend with earnings has not been that great.
There is nothing that healthy coming out. But your tech names are the ones
that are being driven by cash. You`re getting those buybacks and you`re
getting those dividend increases and that`s what investors want.
HUDSON: Is that what is driving — we talked a lot over the last
year or so about the search for yield in dividends or the place where
investors have really profited is that — this is the next industry to see
the next big dividend push up?
MALANDRINO: I absolutely think it will be. Because you know what,
look at how many investors are screaming for Apple (NASDAQ:AAPL)
(NASDAQ:AAPL) to do something with their $100 billion in cash. In their
conference call, they mentioned that they are actively seeking to do
something with their cash potentially, a dividend increase. Now you know
dividend seekers, that baby boomer generation has a disposable income that
wants to put that new money to work. But they need to have some incentives
to do so.
HUDSON: Jill, let`s put Apple (NASDAQ:AAPL) up on the
chart, AAPL the ticker symbol. You mentioned the earnings call, blow away
earnings that we saw in the last couple of weeks. But the question for the
share price here at $450, is that sustainable?
MALANDRINO: I certainly think it`s sustainable. Look, ultimately at
the end of the day our dream would be a nice three for one stock split to
get that thing under $150 bucks and get some new fresh capital to work.
Ultimately that is what investors want to see, but where it is right now
this company is growing. There is a ton of cash. And I think there is way
more room to run with this.
HUDSON: You also have identified a semiconductor equipment maker,
KLA Tencor (NASDAQ:KLAC), highest share price tonight just off its highest share price
since 2007. Demand for semiconductors
has been mixed though with the PC slowdown, hasn`t it?
MALANDRINO: That is definitely true, but KLAC continued. It
blew away the quarter surprising investors and analysts alike. They are
expecting to slightly increase their hiring numbers which is always a good
thing to see because that means that there is money there from the balance
sheet to put it to work with increasing their head count. I think out of
all the names within the sector, the growth story, this is the one that you
need to take a look at.
HUDSON: Speaking of Apple (NASDAQ:AAPL) and KLA
Tencor (NASDAQ:KLAC), how about for yourself Jill? Do you have any positions, equity or
options or otherwise?
MALANDRINO: I do not.
HUDSON: You can read Jill`s article about technology perhaps saving
2012 with dividends and share buybacks at the thestreet.com. A link on our
web site as well. It`s our guest this evening, Jill Malandrino with us from
thestreet.com. Thanks Jill.
MALANDRINO: Thank you.