Tech picks disappoint
Too many positive calls, particularly in the tech sector, have hurt the track record for CNNMoney's Stock Spotlight feature this year.
NEW YORK (CNNMoney.com) -- The stock pickers here at CNNMoney have been positively overflowing with optimism this year.
Through the first half of 2006, we've done twelve Stock Spotlight features, and eight of these profiles have concluded with a buy recommendation.
That, unfortunately, has come back to haunt us as we take a look at how our picks have fared so far.
One common theme through most of this year's picks is that we've expected many well-known blue chip tech names to thrive. This hasn't been the case.
For instance, a bullish call on semiconductor leader Intel (Charts) back in January bombed. Shares have fallen more than 25 percent due to fears about increased competition from AMD, as well as concerns that Intel relies too much on the maturing PC and server markets.
A positive take on search engine kingpin Google (Charts) has also failed to pan out. The stock is down 3 percent since late January, but it was actually down a lot more than that earlier this year, so the stock's recent strength is a good sign.
Predictions of more good things to come for Cisco Systems (Charts) and Motorola (Charts) in March - when each stock was already riding a significant wave of momentum - appears to have also been misguided. Both stocks have cooled during the past few months; Cisco is down 6 percent and Motorola has dropped 10 percent.
The one good tech call we made was, in fact, a negative one. In early February, we warned readers to steer clear of Dell (Charts) due to the resurgence of Hewlett-Packard, as well as the aforementioned maturation of the PC industry. Dell's stock has dropped 23 percent since then.
Turning away from tech, we've also had mixed results looking at stocks in other sectors.
Coke is it...and so is ethanol
However, we predicted in April that troubled drug maker Merck still had some more downside. Wrong. The stock is up another 6 percent since then. That's a bitter pill for us to swallow.
And we shouldn't have recommended that investors hang up on AT&T in April. So far, investors don't appear to be scared off by the telecom sector's sluggish growth prospects, or worried by possible merger integration headaches as AT&T absorbs BellSouth. The stock is up 10 percent.
Positive calls on Sony and Lowe's also have been disappointments. Sony, which has enjoyed a nice run under the leadership of new CEO Howard Stringer, has nonetheless cooled lately. The stock has fallen 7 percent since we wrote about it in early May. And Lowe's has dipped 3 percent since we profiled the company.
But we have at least ended the first half of the year on a winning note with our two most recent picks.
In June, we said that investors should steer clear of Univision, since it looked like the Spanish language broadcaster was not going to fetch as high a price in a takeover as was originally thought. We were dead-on with that prediction. Shares have tumbled 8 percent, even though the company finally recently agreed to a sale.
And ethanol mania continues. We looked at agricultural giant Archer Daniels Midland a few weeks ago and said that the company, which is the world's largest producer of ethanol, the fuel made from corn, still had room to run despite a torrid first half of the year. Shares have surged another 6 percent since we wrote about ADM.
All in all, we're not thrilled with our picks. We'll review these selections again, as well as the picks we'll make in the second half of the year, in December.
Hopefully, the recent market enthusiasm following last week's Fed meeting augurs well for the remainder of 2006.
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