Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL), Intel Corporation (INTC), QUALCOMM, Inc. (QCOM): 3 Large-Cap Tech Stocks to Buy on the Taper Tantrum

Page 1 of 2

As the Federal Reserve hints at tapering its bond buying program over the next year, cyclical stocks, including technology, should become interesting buys. Tech stocks have underperformed the market rally over the last year as investors have piled into high-yielding stocks to counter low bond yields. Now that money should flood out of those stocks and bonds into growth stocks.

Apple Inc. (NASDAQ:AAPL)

The main reason the Fed would stop bond buying would be a generally stronger economy, a situation that should benefit tech stocks that have underperformed. One group that should outperform in this rotation into growth stocks includes Apple Inc. (NASDAQ:AAPL)Intel Corporation (NASDAQ:INTC), and QUALCOMM, Inc. (NASDAQ:QCOM). These beaten-down stocks not only offer the ability to rebound off weak trading, but the businesses could improve as economies around the world rebound. Not to mention all three stocks offer dividend yields over 2.3%, which should be attractive in the low-yield environment.

As the chart below shows, these stocks have dramatically underperformed the market over the last year:

AAPL Total Return Price data by YCharts

Leading tablet producer

After losing nearly 30% over the last year, the former largest stock in the world now offers a compelling valuation trading at 9 times next years earnings while yielding 3%. Apple Inc. (NASDAQ:AAPL) continues to produce innovative products, but the lead in the important smartphone and tablet markets has been diminished to the point that some believe Samsung produces better gear. The company still maintains a rabid user base tied into the operating system and iTunes purchases.

With a marker cap around $375 million and cash balance around $150 million, Apple Inc. (NASDAQ:AAPL) has an absolutely compelling valuation, even considering the waning dominance in key markets. Regardless, analysts still see huge earnings and strong cash flow that will allow the company to continue buying back stock on the cheap and raising the dividend rate.

High yielding semiconductor

Intel Corporation (NASDAQ:INTC) offers one of the highest yielding stocks that has underperformed the market over the last year. At last count, the stock offers a 3.7% yield and only trades at 12 times forward earnings. Analysts expect earnings to grow at an 11% rate over the next five years, though the 2014 numbers are below those reported in 2012.

As with Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC) has reached a valuation and revenue base suggesting that growth might have maxed out. The company, however, continues to generate huge profits and cash flows that allow it to pass the cash on to shareholders via stock buybacks and large dividends.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!