The market doesn’t know which way to go. Investors rarely get direction without a personal opinion. The American Association of Individual Investors survey for the week ending May 7 indicated that 28.3 percent of investors are bulls, 28.7 percent are bears and 43 percent remain neutral.
The blue-chip stocks are priced sensibly, with safety in the large industrials. Dividends are mostly secure – companies are doing better and willing to raise their dividends. Most corporate first-quarter earnings are positive, and only a few tech companies are getting slammed.
It’s hard to determine the effect of global affairs on the market. If the conflicts in Ukraine and/or Syria deteriorate into broader regional wars or disrupt supply chains, the hit to the market could be substantial. However, at present, neither conflict appears a threat to U.S. corporate earnings.
Secondary reactions could occur at any time causing a market pullback, but 43 percent of U.S. investors remain neutral and are sitting on their money.
Regardless of the market’s potential to correct, numerous attractively valued stocks with solid growth potential are available for purchase.
Two Town Crier “50” stocks reported their first-quarter earnings recently.
• LinkedIn Corp. (LNKD; $151.29) last week submitted papers to Mountain View officials for multioffice buildings that could encompass 2.6 million square feet and house up to 13,000 workers. The Mountain View-based company currently occupies approximately 767,000 square feet of office space in the city.
The company reported its first-quarter results May 1, with revenue at $473.2 million, an increase of 46 percent compared with $324.7 million in the first quarter last year.
The net loss attributable to common stockholders for the first quarter totaled $13.4 million, compared with net income of $22.6 million for the first quarter of 2013.
“Our first quarter was strong for LinkedIn in terms of our member engagement and financial results,” said CEO Jeff Weiner. “We made significant progress against several strategic priorities, including expanding internationally with our China launch and furthering our goal to make LinkedIn the definitive professional publishing platform for members.”
Founded in 2003, Linkedln, a business-oriented social networking service, connects the world’s professionals with an aim to make them more productive and successful.
The stock’s upgrade and downgrade history has maintained either a buy or an outperform position, with seven analysts recommending a strong buy. The median target price is $230, with a high of $280.
• NVIDIA Corp. (NVDA; $18.54) released first-quarter results that beat analysts’ estimates. Revenue came in at $1.10 billion, which increased 16 percent to surpass estimates.
Profit, excluding some items, rose to $166.1 million, compared with $113.8 million, or 18 cents, a year earlier. On average, analysts had predicted a profit of 21 cents on sales of $1.05 billion, according to Bloomberg.
At the end of the first quarter, the Santa Clara-based company had $4.34 billion in cash and cash equivalents, while its long-term debt stood at $1.37 billion.
The stabilization of the PC decline prompted better-than-expected results. NVIDIA’s graphics processing unit segment, which depends on PC sales, provided a significant portion of the total revenue. The company’s Tegra business is also improving, with Microsoft selecting NVIDIA’s mobile processor for its tablets and smartphones.
NVIDIA’s dividend yield is 1.8 percent, or 34 cents per share. The stock price has gained 14 percent to date this year, though it lost 2 percent May 6 when the first-quarter results were released early.
The stock’s upgrade and downgrade history has been a market perform or a hold. The median target price is $19, with a high of $26.
Clyde Noel is a Los Altos Hills resident and longtime investor in stocks.