High-quality large caps offer the most compelling valuations.
--Current near-term economic uncertainty is presenting a buying opportunity in higher-quality names.
--In an environment of tightening corporate IT budgets, we would look to invest in attractively valued firms that sell mission-critical products with recurring revenue streams attached. The software industry is a natural hunting ground for firms with these characteristics.
--Cloud-based services and mobile computing will continue to be major disruptive forces within IT. Hardware firms will be forced to adapt in a rapidly shifting landscape.
The Nasdaq fell nearly 13% from the end of the second quarter through Sept. 22, as macroeconomic uncertainty and disappointing outlooks from a number of hardware and semiconductor firms weighed on market sentiment.
Weakness from large firms like Dell
Software and services firms have yet to show signs of weakness, with Oracle's
This near-term uncertainty has created a number of buying opportunities across our coverage, and we are currently finding the most value among large-cap firms with durable competitive advantages. Given the current uncertain macroeconomic outlook, we see little reason to look beyond these high-quality, attractively valued large-cap firms; and we highlight five of our favorite ideas below.
Industry Level Insights