Tech Executive Tone Described as Neutral to Bullish; Investors Seemingly a Lot More Leery, Corbin Advisors Research Finds
- 76% looking for in line or worse than consensus 1Q16 results, down just slightly from 80% in December
- Investors see software as impervious to market volatility but anticipate challenges in computer hardware and office equipment on capex headwinds and continued cloud migration
- Analytics remains the most attractive investment theme while investors see opportunity for growth in Security, SaaS and Payment systems
- IPO market may not turn around until late 2016 or early 2017, investors say
HARTFORD, Conn. – April 22, 2016 – Corbin Advisors, a leading investor research and investor relations (IR) advisory firm, today released its quarterly Tech Sentiment Survey, which reveals tech investors exhibit a neutral stance toward the sector as bulls recede and bears creep in. The survey, part of Corbin’s Inside The Buy-side® research group, is based on responses from 28 investors managing over $647 billion in assets globally who follow the tech sector.
The increase in bearishness to 21% is driven largely by macro concerns; the more than half (57%) that say their sentiment on tech has improved since the start of 2016, base their view largely on valuations versus fundamentals.
“Techs continue to endure erosion in top-line growth due to slowing capex with investors seeing few catalysts to reignite the flame,” said Rebecca Corbin, Founder and CEO of Corbin Advisors. “The playing field continues to level and techs may see pressure as investors flock to oversold sectors further along in dealing with the late cycle dynamics.”
One sell side participant cited “focus on cost cutting versus growth” and “poor spending trends” as weighing on the sector, yet a buy-side respondent saw these trends as indicative of “good margins and [strong] balance sheets.”
On the question of which tech heavyweight is expected to outperform in 2016, Google and Facebook tied for the top spot; each cited by 23% of respondents. Microsoft followed closely behind at 19%, while Apple trailed at 15%.
Among tech’s many subsectors, Analytics and the Cloud were cited as most attractive, with the Internet of Things falling out of favor since the end of 2015.
“Tech investors are taking a slight pause,” Corbin said. “While certain subsectors are filled with interesting growth stories, the broader theme is cost-consciousness and the desire to weather the storm.”
Since 2006, Corbin Advisors has tracked investor sentiment on a quarterly basis. Inside The Buy-side® and other research on real-time investor sentiment, IR best practices and case studies are available at CorbinAdvisors.com.