Friday's surprising news was not the strong US employment figures, but the market's sane response to the figures. For the first time in a long time, the market has responded enthusiastically to good news, and not turned good news into bad out of the fear that the central bank would disconnect the US economy from the breathing apparatus it has been attached to in various forms since the great crisis.
They say that the 7% unemployment rate that the US economy reached in November was set in advance as a milestone for reducing the flow, but experts believe that the quantitative easing program will start to be reduced gradually only in March.
Despite the rises on Friday, the markets were flat for the week, but among the major technology stocks, Intel (INTC), which is in my portfolio here, stood out with a rise of more than 4%. Anyone who thinks that Intel investors are frustrated this year, because the company again missed out on the mobile market, and the PC market continues to fade, should take another look at the return on the stock since January.
Although Intel has not risen as much as the Nasdaq index this year, it has risen nearly 25% year-to-date, which compares with an 8% rise for mobile devices queen Apple (AAPL). Even mobile processors queen Qualcomm (QCOM) has produced a lower return than Intel, at 21%.
What's more, Intel paid investors a dividend of about 4% this year, double Qualcomm and almost double Apple. Intel's rise last week was mainly thanks to Citi (C) analyst Glen Young, who upgraded the stock to "Buy", and the momentum could last into this week, after Barron's included it in its ten recommended stocks for 2014.
Both Barron's and the analysts believe that the PC market is stabilizing, and that in the coming years Intel's well-known production capacity will give it a substantial advantage over its competitors in the mobile market, on which new CEO Brian Krzanich is focusing. With the world's most advanced production lines, the race to smaller, faster processors with lower energy consumption, as smartphones and tablets improve in performance, should give Intel a significant edge.
If the experts' guess about Intel's success in making significant inroads into the mobile market proves correct, then investors should also find it worthwhile gambling on small Israeli company Ceva Inc. (Nasdaq:CEVA); LSE:CVA). For many years, Ceva has collaborated closely with the mobile processors division of German company Infineon, which was sold to Intel.
When Intel supplied its cellular processors to the first iPhones, Ceva was there as the supplier of the DSP solutions, and it is continuing with Intel in the upcoming competition with Qualcomm, which is currently almost alone in the LTE market.
The casino for betting on the mobile market in the coming years gadgets, processors, applications, and all the rest will open officially in early January, with the world's biggest electronics show, the 2014 International Consumer Electronics Show (CES 2014), which will take place in Las Vegas and which will be opened by the Intel CEO.
Ceva will be there, and will present its DSP solutions for the coming generations of mobile, the digital home, the automobile market, and more. Another important Ceva customer, Broadcom (BRCM), is due to present its updated roadmap for the LTE market, after a severely disappointing year. Ceva also has a close working relationship with Samsung, which will unveil new gadgets at Las Vegas. One company that will not be there is Spreadtrum (SPRD), Ceva's spearhead in the huge Chinese market.
Institutions believe in Attunity
After years, Attunity (ATTU) has gained some coverage, and not just any coverage, but a "Buy" recommendation with the very high price target of $13.5. True, it's a predictable recommendation from investment bank Roth Capital Partners, which not long ago raised nearly $20 million for Attunity, but the interesting thing is that despite a huge profit in a short time on Friday, more than 30% over the $7 offering price-I have not seen aggressive sales by institutions that participated in the offering.
It seems that most of them believe that Attunity really does stand a good chance of succeeding in today's most interesting market, Big Data and cloud computing. Many software companies in this field are traded at fancy p/e ratios.
If at one time I thought that CEO Shimon Alon had come in to make a quick exit, today I believe that he once more has an appetite to reach the order of size of Precise, which he sold for hundreds of millions of dollars. His consent to a low offering price of $7 indicates, in my opinion, that he wants institutions that are happy with him, with a view to further possible financing rounds in the coming years, in accordance with the company's growth.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2013
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