Institutional Investors Are Positive on Technology Sector despite Mixed Market Performance Heading into Second Quarter Earnings According to Corbin Advisors Research
- 72% of surveyed investors expect second quarter results in line or better than expectations
- Overall sector attractiveness is characterized by superior innovation, industry consolidation and outsized organic growth opportunities; investors are most bullish on cloud, software and the U.S. while downbeat on PC-related hardware
- Investors are largely more bullish based on organic growth and margin expansion in 2Q15 when compared to sell-side analysts, who are more cautious as a result of concerns regarding the global economic landscape
- 82% of investors and 75% of sell-side analysts assert current market valuations are sustainable or have room to expand
HARTFORD, Conn. - (BUSINESS WIRE) - July 17, 2015 - Corbin Advisors, a leading investor research and investor relations (IR) advisory firm, today launched its inaugural Technology Sector Sentiment Survey, within its Inside The Buy-side® research group, pulsing global investor and analyst views as the second quarter earnings season gets underway. Corbin's independent poll identifies several areas where buy and sell side opinions diverge, as well as emerging trends and sector themes that serve to assist both investors and corporates navigating the diverse tech landscape. The survey, based on responses from 29 institutional investors whose firms manage approximately $900 billion in total assets globally, remained open from July 10 - 15, 2015.
Investors report they took advantage of the geopolitical market weakness of late and increased their weighting in tech. “Analysts may have overestimated bad macro news, such as weak U.S. data, China worries, the EU-Greece stalemate and weakening demand outside U.S.,” according to one European sell-side analyst.
Despite trading above historical averages, U.S. equity market valuations in the technology sector remain attractive, as investors favor long-term growth opportunities. Drilling down, survey participants are most bullish on cloud and software as themes. “The tech sector will continue to be attractive as the U.S. economy continues to rebound. The prospects of the sector will be grounded by fundamentals and not artificially helped by QE and other stimulus measures,” noted one analyst.
“While there will be winners and losers within the tech sector this earnings season; our channel checks indicate overall stronger-than-expected company results will be driven by solid growth, cost control and other company-specific initiatives,” commented Rebecca Corbin, Founder and CEO of Corbin Advisors. “Tech sentiment remains resilient despite recent macro events, and as a result, we should see continued rotation into the sector.”
Finally, despite continued headlines on companies repurchasing stock, no survey respondents report share repurchases as their preferred use of excess cash, underscoring a hunger for growth and views that valuations are not cheap.
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.