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Monday, December 9, 2013
Some of the world's best businesses have the big trend in their favor... And Growth Stock Wire readers are making great money on it...
Last spring, we wrote several essays showing you that some of the greatest tech companies in the world had suffered terrible corrections... and were trading at cheap valuations.
We told you to "go long" using a special leveraged fund.
If you took our advice then, you've made good money. And the great news is, these same conditions are still in place.
Big Cheap Tech could power much, much higher...
At this time last year, stocks like Microsoft and Intel had suffered huge corrections. Folks were worried about the "Death of the PC"... which would reduce demand for these companies' products.
Apple, too, was well down from its highs. The stock had reached a frenzy of popularity... and the bubble burst, sending shares down 44%.
But as we noted in April, things were finally starting to turn around for these tech giants. Microsoft shares were back near 52-week highs... Intel had climbed 16% in two months... and after sinking below $400, it looked like Apple might finally be ready to bottom.
We suggested buying a "basket" of these stocks through the ProShares Ultra Technology Fund (ROM). ROM is an exchange-traded fund designed to return double the performance of the Dow Jones U.S. Tech Index.
It holds stakes in more than 100 companies. But about 70% of its weighting is in just 10 stocks... most of which are the Big Cheap Tech "dominators."
As you can see in the chart below, ROM has powered higher over the last eight months. Shares are up 44% since our April note.
The thing is, this incredible run higher could continue...
Cisco, for example, has $48 billion in cash. That's 42% of its market cap. So buying a Cisco share is like buying a sweater for $100 and finding $42 in the pocket. Once you take that cash hoard into account, you're only paying about six times what the company is expected to earn in 2014.
Other major ROM holdings trade for between eight and 10 times forward earnings, once you account for the cash.
In other words, despite their strong recent gains, tech stocks are still cheap... and you shouldn't get scared out of them. This uptrend could run much further from here. If you own "Big Cheap Tech," stay long.
Amber Lee Mason and Brian Hunt
P.S. We've been showing readers of our DailyWealth Trader service how to generate large, SAFE payouts using these high-quality stocks. Our Apple trades, for example, are averaging a 34% annualized return. And that's with folks taking on LESS risk than simply owning the stock. We'll show you exactly what our strategy is right here.
Apple and Cisco are just two examples of Big Cheap Tech companies sitting on hoards of cash. In October, Brett Eversole outlined five more. And according to him, "these technology giants could rise by 50% as a whole and they still wouldn't be expensive." Find out which companies here.
And just last week, Amber and Brian pointed out another sector in the midst of a major uptrend. "Of all the trends at work in the stock market, few are as strong as this..." Get the full details here.
"Big Pharma" trend keeps chugging along... drug sector fund PJP breaks out to a new all-time high.
Huge "bad to less bad" rally sends Delta Air Lines up 184% over the past year.
"Oil sands" giant Suncor falls to a three-month low.
Another bullish sign for housing... big paint maker PPG Industries hits a new all-time high.