Tech Poised for Earnings Growth: Gina Martin Adams

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April 7 (Bloomberg) -- Gina Martin Adams, senior institutional equity strategist at Wells Fargo, explains why the tech sector is on the verge of earnings growth on Bloomberg Television’s “Bloomberg Surveillance.”

You plan to stay overweight?

We have a methodology for sector selection.

We look at price momentum as a factor.

As a little concerning, but not terribly concerning.

We look at earnings which is improving for the sector.

We look at valuations which is still extraordinarily cheap.

Our estimates suggest that tech sector earnings should grow about 10% this year, which is significant.

We're seeing the early signs of capital spending improvement in tech which should translate into much better earnings.

We have to see something move to reduce our overhead.

Any correlation to the twitters of the market to the colgate-pall mall at submarket?

They seem to be two separate universes third twitter rolling over to be polite?

Do i care?

You do to degree.

You care because it is part of a larger group of constituents.

With the loss of the leadership, you have to see another sector.

Here's the dirt.

Gina martin adams calls on the people that manage our retirement accounts.

To the by twitter?

To the people managing my money care?

Not as much.

There is a followthrough effect of what happened with twitter in some of these highflying tech happenings in the broader s&p 500 index.

There is a sentiment winds, so to speak.

Here's the thing.

Todd is absolutely right.

Twitter is its own thing.

Tech in general trades at 30 times earnings.

You're saying earnings go up 10%? s&p -- market cap rated companies in the s&p 500 heard when you look at the tech industry broadly, we look at the pe adjusted for market cap.

That suggests that tech is only trading at 14 times earnings not 30. if you think about the broad section of tech, you have companies like google in there and facebook.

You have ibm and the whole spectrum.

It is a much cheaper prospect than an adjusted measures such as yours.

In addition to being overweight in technology, you are also overweight in health care.

What you make of the buyer tax?

Evaluation is not there.

They're relatively expensive where broad tech is not as expensive.

We will see if it becomes much bigger.

Health care has been our favorite sector for nearly three years.

There's just a persistent recovery in earnings growth.

There is some cyclicality to it.

It is broadly been a very strong sector.

Scarlet fu will bring you earnings.

We pride ourselves on this one.

We go beneath the headline data as earnings come out.

Jpmorgan and wells fargo on friday.

We will talk about the dynamics of earnings, the dynamics of resident -- of revenues and what the leadership actually says and does, and the blather behind it.

Gina will be rejoining us shortly.

Coming up in the next hour of "surveillance," arias huffington

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


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