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Quarter-End Insights

Tech & Telecom: Big Data Takes Many Forms, so Choose Wisely

As enterprises allocate spending toward data analytics, we see increasing complexity leading to opportunities for legacy technology providers and services firms.

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  • There are pockets of undervalued, albeit higher-uncertainty, stocks in the international telecom space, but in aggregate global telecom is fairly valued, while the technology sector appears slightly overvalued.
  • While "pure play" data analytics companies are modestly overvalued, several legacy technology companies will benefit from the increasing complexity of "big data" solutions.
  • Companies with unique customer data and broad reach will allow digital advertisers to better target users with display advertising, but the investment opportunity has greater downside than upside at today's levels.
  • The FCC's tough stand on competition has deflated wireless valuations and cast some doubt over the pending acquisitions of  DirecTV (DTV) and  Time Warner Cable (TWC). The best telecom opportunities remain overseas, however, as opportunities still exist in both Europe and Asia

 

Peter Wahlstrom does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.