Disdained Tech Stocks Are Booming

Wednesday, 28 Nov 2012 07:46 AM

By Michael Kling

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Maybe now they can get some respect.

Tech and Internet stocks that experts widely disdained have done well recently — quite well, notes CNBC.

For instance, Research in Motion, the underperforming maker of the BlackBerry, is up 53 percent over the past month.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

Facebook's stock value was supposed to plummet as post-initial public offering lockouts expired. It rallied instead and is up over 18 percent over the last month.

Yahoo, which recently had a questionable future, is up over 25 percent over the last three months. That's during a time when the Nasdaq was down more than 3 percent, according to CNBC.

Why the large reversals? When stocks are widely despised, CNBC hypothesizes, even small bit of good news, such as a favorable analyst's report, can prompt them to shoot up.

And it doesn't take much, according to CNBC. Anecdotal evidence or an earnings report that's not horrible might do.

"Find a group of stocks that everyone hates, that are down significantly, and buy them," Matt Gohd, senior managing director at WallachBeth Capital, told CNBC.

For instance, Gohd now recommends Zynga, a provider of social game services, which he says might jump 50 percent, according to CNBC.

Research in Motion started its rally after reporting better-than-expected results at the end of the quarter, CNBC reports. Plus, an analyst at Jefferies said the firm might avoid a worst-case scenario and that its new BlackBerry has a 20 to 30 percent chance of success.

Many beleaguered tech stocks rose during Black Friday's shortened trading session, MarketWatch reports.

Hewlett-Packard, Dell, Advanced MicroDevices, and Microsoft all advanced. Many tech firms have struggled this year because of slowing PC sales, according to MarketWatch. Research in Motion jumped 14 percent after National Bank analyst Kris Thompson in Toronto raised his price target, citing increased shipment targets of its new smartphone.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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