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Revisiting The Old Tech Troika

February 8, 2012 4:59 am
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Revisiting The Old Tech Troika


<img align="left" style="padding: 0 10px 10px 0; width: 110px; height: 130px;"  src="http://phillyimprov.files.wordpress.com/2010/04/troika21.jpg" alt="Troika" />In case anyone was wondering why the NASDAQ was doing great, one of the reasons was that the old tech troika, Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), and Cisco Systems (NASDAQ: CSCO) were doing great.  Since we mentioned them in <a href="http://www.10xreturn.com/blog/post/2011-07-05-microsoft-intel-cisco-mic-can-the-troika-grow-agai-part-1">our articles last year in July</a>, stock prices of the troika have appreciated quite a bit.  Microsoft went from ~$25/share to ~$30/share, Intel went from ~$22/share to $26/share, and Cisco went from ~16/share to $20/share.  In short, appreciation of each troika far outpaced appreciation of the NASDAQ composite, which went from ~2825 to its current level of 2900.
Each troika has its individual reason for appreciation.  Microsoft keeps getting strong cash flow from its Windows franchise, Intel is targeting the mobile arena, and Cisco finally admitted its previously flawed strategy of getting into too many sectors.  The fact that Microsoft and Intel each pays > 2% dividend makes it even better for investors in their stocks.
Going forward, the rolling out of Windows 8 should give Microsoft another boost, although its mobile strategy has yet to show any progress.  Intel must now demonstrate that it can get design wins for mobile devices other than ultrabooks, and must make inroad in smartphones and tablets.  Cisco seems to be back on the right track, and needs to get back to its root and learns to innovate from within the company again.  Apple may still be dominating the headlines, but the troika should be doing just fine if they can keep executing.



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