There Is No Tech Bell-Weather Stock: Martin Adams

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Jan. 21 (Bloomberg) -- Gina Martin Adams, institutional equity analyst at Wells Fargo, discusses why there is no longer one single bell-weather stock for the tech industry on Bloomberg Television’s “Bloomberg Surveillance.”

Is there a tech bellwether anymore?

Good question.

I think you have to look at tech edits multiple parts.

Every segment does have a bellwether.

You have google, for example, apple hardware, cisco into medications equipment.

I think each segment potentially has a bellwether, but i don't know if you can point to one company as an example of the sector.

You talked about intel having a relatively difficult outlook or quarter.

It masks what is happening across tech.

One of the great part of this earnings season is tech revenues are increasing a lot more than analysts expected.

And not through mergers and acquisitions.


We are still early, but of the nine companies that have reported, 8 have been on the topline.

Is this about the capital expenditures that were held back for so long starting to return?

It is a little bit of that, little of the consumer.

Just enough that expectations for tech specifically had been beaten down and now we have just enough spending to be those expectations.

How our margins, in?

It is enough.

Earnings are not as positive as sales so far in terms of beating the expectations number's, but earnings are still beating.

This idea of getting your numbers in line from cost- cutting, we have heard ibm cut a lot of jobs and other tech companies doing the same.

How much more juice is there left to squeeze?

And tech, it is quite a bit.

Era still more?

-- there is still more?

A lot of it is because of the sector transitions away from hardware into software and services.

Software and services has much more room to cut.

Companies are shedding segments.

That will change the prophet picture significantly.

Tech overtime has shown a 15- year trend of accelerating margins.

I don't think you want to fight that trade.

What about health care, which is another sector you have been eyeing?

Is there room to cut costs there?


Health care has been one of our favorite sectors for three years.

This year it is more about topline growth for us than it is about margins accelerating.

I do think there's plenty of room for margin growth in health care as well.

It is one of the laggards of the cycle.

Health care, consumer staples can show the system margin growth over the next -- looking for a catch appearing in the year 2014. gina martin adams is our guest host for the hour.

Coming up, microsoft cofounder ok's will be sitting down with michael bloomberg for a conversation on the importance of giving back and his efforts around the world.

That is this morning at 9:30 a.m. on bloomberg television.

There brings us to our twitter question of the day -- this is "bloomberg surveillance." ?

This text has been automatically generated. It may not be 100% accurate.


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