Is the IT Sector Ready to Rumble? Not Yet!
Based on our ratings of 886 U.S. Information Technology stocks, 13.9 percent of them are a BUY, 27.4 percent are a HOLD, and over half of them (58.7 percent), are SELL rated.
Here are the top five U.S. IT Sector stocks, they are all A rated and performed the best in 2016 so far. The list is sorted in a descending order based on year-to-date performance.
Company Name |
Ticker |
Investment Rating |
Year-to-Date Returns % |
Market Capitalization in Billions $ |
Texas Instruments Inc. | TXN | A | 31.83 | 70.50 |
Broadridge Financial Solutions, Inc. | BR | A+ | 29.17 | 7.92 |
Facebook, Inc. | FB | A | 20.88 | 354.82 |
Amphenol Corporation | APH | A- | 20.88 | 18.89 |
Lam Research Corporation | LRCX | A- | 20.81 | 14.93 |
Table Data as of 08/22/2016 |
The IT sector has some major giants that are doing quite well but some appear to have reached a plateau. Apple and its iPhone, for example. The (formerly) revolutionary gadget is no longer such a hot item, and Apple struggles to maintain steam. Going back and making smaller phones appears a desperate move due to a lack of new ideas and technology. How many different sizes of iPhones and iPads can they make and not be boring? Apple stock was downgraded by Weiss to B- from B in March 2016.
The self-driving car was a ground breaking innovation. But now that all the initial hype has died down, it doesn’t get people that excited anymore, even though they haven’t actually been released onto the market yet. It is a bit like discovering your favorite TV actor died when you thought they had passed years before--slightly underwhelming.
Below is a short list of U.S. IT stocks that are E rated, have over $10 million in market capitalization and performed poorly in 2016. The list is sorted in an ascending order based on year-to-date performance.
Company Name |
Ticker |
Investment Rating |
Year-to-Date Returns % |
Market Capitalization in Millions $ |
Year Founded |
Spark Networks, Inc. | LOV | E+ | -61.52 | 38.14 | 2007 |
Rubicon Technology, Inc. | RBCN | E+ | -61.27 | 17.98 | 2001 |
Hortonworks, Inc. | HDP | E+ | -59.35 | 501.08 | 2011 |
InterCloud Systems, Inc. | ICLD | E+ | -56.44 | 16.92 | 2006 |
MEC, Inc. | MYEC | E+ | -53.05 | 28.88 | 2004 |
Table Data as of 08/22/2016 |
You will see that some of the SELL rated companies are newer, with lots of volatility. They can produce significant returns, but the risk involved may outweigh the possible returns for some investors.
Business operations are also changing. Companies like Cisco are cutting jobs as it integrates with cloud services, eliminating steps that were previously performed by a human being.
So overall, the IT sector is moving and shaking and working towards the next big thing, but it’s not there yet. Although there are strong companies in the sector, the number of unproven and underperforming players weigh down the group.