Dundee: tech shares in secular bull market

Not to run the risk of talking up our own book, but as folks who spend much of our time financing technology companies, we can’t help but pass along this particular point of view from the Equity Research team at Dundee Securities (from their Software & New Media Weekly report):

We do not believe that we are in the midst of a flash in the pan recovery but rather the early stages of another secular bull market for tech equities. What gives us this confidence? Firstly, on the enterprise side, we have seldom come across an impulsive IT buyer. The rebound we have observed from our channel checks and recent results from the likes of Oracle and Intel are a signal that enterprises are slowing wading back into the water. Judging by shipping data, end user demand has clearly picked up. This comes at a time when the average age of the corporate PC/server fleet is 4-5 years old and unable to take advantage of new yet proven themes like Windows 7, cloud computing, mobility and social media.

· Chinese GDP grew 12% in first quarter, fastest growth since 2007.

· Philadelphia Fed index came in line at 20.2. Empire index well ahead at 32 vs. the street’s 24.

· Initial jobless claims rose to 460K, above last week’s 442K and the street’s 435K.

· Retail Sales grew +1.6%, ahead of the streets +1.2% and last month’s +0.5%.

· Intel reported a record FQ1, handily beating expectations and issuing guidance above the street. Mgmt pointed to a rebound in corporate spending.

· Infosys beats forecasts and issued strong guidance. Mgmt seeing a rebound in discretionary spend.

· UPS pre-announced stronger than expected results for the quarter and raised guidance.

· RIM has agreed to repurchase 2M of its shares, which effectively completes its buyback program announced in Nov 09.

· Apple postpones iPad’s international launch due to strong US demand – 500K sold in first week.

· Google reported strong Q1 results but did not exceed the “whisper numbers”. Shares fell.

MRM