I Know First Review: March 7th 2014

March 17, 2014

The stocks selected here are the top performing stocks from I Know First: Daily Market Forecast’s February 7th 2014 Best Tech Stock forecast titled Best Tech Stocks: 41.80% Gain In One Month. The I Know First Average return was 10.77% and all 10 forecasts were accurate.

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On the forecast date, Advanced Micro Devices Inc. (AMD) had a long signal of 55.16 and a predictability of 0.32 for the 1-month time horizon. The stock returned 15.84% in accordance with the algorithms forecast. Fridays big stock gain coincided right after AMD CEO Rory Read made an appearance CNBC’s Fast Money on Thursday. Read talked up building long-term strategic relations by winning both platform processors and graphics wins for the Microsoft (MSFT) Xbox One and the Sony (SNE) PlayStation 4. They also plan on creating a broader reach in servers and embedded systems. Under Read, AMD has been moving beyond the PC market. When Read became CEO, about 4% of AMD’s revenues were outside of PC applications. Now this figure is about 30%.
Read our detailed assessment: AMD: A Fundamentally Solid Company With An Exaggerated Negative Outlook

Shares of Microsoft (MSFT) are up more than 5% since Satya Nadella was named CEO on February 4th earlier this year. Three days after Nadella’s appointment as CEO, I Know First’s algorithm placed Microsoft into the Best Tech Stocks. MSFT had a signal of 2.07 and a predictability of 0.29. In accordance with the algorithm Microsoft grew 5.54% from the forecast date. Since then, Nadella has made some changes in Microsoft’s C-Suite. Among the recent moves, Mark Penn has been appointed as Microsoft’s new Chief Strategy Officer. Nadella has also added two top marketing executives.
Read our detailed assessment: Why Nadella Will Lead Microsoft In The Right Direction

Netflix (NFLX) has increased 9.92% in accordance with the algorithmic prediction from the forecast date. This stocks signal was 1.06 and the predictability indicator was 0.14. On January 22nd, Netflix filed a letter to shareholders with the SEC that the company was considering an “evaluation of plan tier’s,” insinuating that price increases are to be expected in the future. Although Netflix would like to keep prices low, content costs are increasing on each front from acquisition, to creation and distribution. The company did state that if prices do change for new members, then existing members “would get generous grandfathering of their existing plans and prices.” However any price changes will be done very carefully, as to not to upset customers since CEO Hastings will not want to make another public apology.
Read our detailed assessment: Netflix Still Has Room To Grow

“In about two weeks, you will see us launch the first SDK for what we think of as Android for wearable’s,” said Sundar Pichai, senior vice president of Android, after outlining Google’s (GOOG) vision of the wearable technology market. Google is ready to release a software development kit for wearable devices at the end of this month. Pichai said smart watches and fitness gadgets are the most popular devices in the wearable category. He gave no indications of Google making it’s own hardware devices. Currently, Google shares are currently priced at 23.57x this year’s forecasted earnings, making GOOG relatively inexpensive compared to the industry’s 34.70x earnings multiple. The company is now up 8.39% YTD and up 4.73% from the forecast date in accordance with the algorithm. The signal for GOOG was 0.62 while the predictability was 0.32.

International Business Machines Corp. (IBM) has been struggling to adapt to the cloud era. CEO of IBM, Ginni Roomette expressed that the company fell short of expectations last year and must address its struggling hardware businesses. The company will continue shifting its focus to cloud services and data analytics while making changes to its hardware products. IBM also agreed to sell most of its low-end server business for $2.3 billion to Lenovo Group Ltd in January. IBM had a signal of 0.56 and a predictability of 0.15, returning 7.45% over the forecasted time horizon.

Amazon (AMZN), the world’s largest e-commerce site, had a signal of 0.56 and a predictability of 0.2. In accordance with the algorithm, AMZN returned 4.93%. The company had a signal of 0.56 and a predictability of 0.2. Amazon is considering raising the price of its Prime service, however a recent survey showed that consumers did not welcome this. In order to add value to the service, the company is considering a music subscription service. Amazon is also trying new businesses like the grocery business and they are even working on developing the world’s first commercial drone delivery system.
Read our detailed assessment: A mazon: The Good, The Bad And The Algorithm

Thanks to record deliveries of roughly 6,900 Model S vehicles, a delivery rate which is expected to continue rising over the next few years, Tesla Motor’s (TSLA) latest quarter produced another jump in its share price. The company expects to complete 35,000 deliveries of the Model S sedan in 2014. This will require production to increase to 1,000 cars per week from the latest report of 600 cars per week. In order to satisfy demand, Tesla announced the construction of the world’s largest battery "Gigafactory" as the Model X should receive even more demand than the Model S. Tesla Motors had signal of 0.45 and a predictability of 0.14. As the algorithm predicted TSLA grew 41.8% from the forecast date.

From the forecast date, Hewlett Packard Company (HPQ) shares rose 6.49% over the forecasted time horizon in accordance with the algorithm. HPQ had a signal of .34 and a predictability of 0.2. Hewlett Packard’s two essential businesses, printing and enterprise hardware ended the fiscal 2013-year strong. These two businesses account for 70%-75% of Hewlett Packard profit. On February 20th 2014, Hewlett Packard Company released their 1Q14 earnings report. The company beat Wall Street expectations of $27.2 billion in revenue with first quarter revenues at $28.2 billion. CEO Whitman stated, “Hewlett Packard is in a stronger position today than we have been in quite some time.”
Read our detailed assessment: Hewlett-Packard: Positive Signs In Q1 2014 Results

Check Point Software (CHKP), a provider of network security software, hardware and services is the second biggest firm in the Computer Software-Security Group. In January, CHKP beat expectations with an 8% rise in Q4 earnings and broad demand for its products helped grow revenue by 5%. Lately the company has been trading around its highest level’s in nearly 13 years. Check Point had a signal of 0.17 and a predictability of .13. The stock grew 7.54% in accordance with the algorithm.

As the algorithm predicted, Apple (APPL) grew 3.5% over the forecasted time horizon. The signal for APPL was .15 and the predictability was 0.2. Apple has just released iOS 7.1. This update includes animation speed improvements, a dedicated list and tray view button in Calendar, power toggle and phone animation as well as shape changes throughout the system. The biggest change however is CarPlay, a new feature that integrates your iPhone with a car’s display panel. CarPlay can be used via Siri voice commands or the car display’s touchscreen. General Motors, Mercedez-Benz and Honda are set to soon roll out models with CarPlay technology.

Selected stocks mentioned from this forecast are not an endorsement for making trading decisions with these assets currently. Please make trading decisions only with the most recent forecast.

Business Disclosure: I Know First Research is the analytic branch of I Know First, a financial startup company that specializes in quantitatively predicting the stock market. This article was written by Joshua Martin one of our interns. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article.