Tech and Telecom: M&A Heats Up, and the Cloud Changes the Landscape
Mergers and acquisitions are ramping up (as are rumors), but with the sector slightly overvalued, we stick to fundamentals and seek firms with established economic moats.
Despite a modest increase for the S&P 500 through the first half of 2015, it hasn't been a particularly smooth ride for investors. Performance for the technology sector in aggregate has been slightly stronger, up around 3%, but there were notable areas of strength and weakness. Global currency movements over the past two quarters have resulted in slightly elevated volatility across both the technology and communications-services sectors, but the overall tone from management teams has been fairly positive in terms of the macro environment. In aggregate, we view the tech sector as slightly overvalued and remain selective in our picks.
Peter Wahlstrom has a position in the following securities mentioned above: AAPL, INTC, MSFT. Find out about Morningstar’s editorial policies.
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