Goldman Sachs: Sell Tech Selectively

Yeoman’s work by Barron’s Eric Savitz, who pens the must read techblog Tech Trader Daily, in assembling a laundry list of stocks downgraded by GS (published Friday after the bell).

The money quote from Goldman analysts states they have become "incrementally more cautious on tech fundamentals given the current macroeconomic backdrop."  

Additionally, "with software a typically back-end loaded sale, if
there is any concern on budgets in the early part of 2008, we would
expect CIOs to hold off their purchases until later in the year."

The main area of concern: "Companies with large enterprise exposure and significant dependence on the U.S. consumer."


I have long advocated deciding on an exit strategy prior to owning a
stock. While these downgrades may not mean immediately selling them, at
the very least you should be revisiting your pre-planned exits. If you
are unsure about selling, your trailing stop losses should give you
some protection in the event of a selloff. If you are not using
trailing stops, then you may want to tighten up your existing stops —
especially on those names that have enjoyed a good run.

What follows is a list of stocks affected by estimate cuts and/or price target changes by sector.

Semis/Chip stocks:

Advanced Micro Devices (AMD)
Broadcom (BRCM)
Entegris (ENTG)
FormFactor (FORM)
International Rectifier (IRF)
Intel (INTC)
Intersil (ISIL)
Microchip (MCHP)
Micrel (MCRL)
Marvell MRVL)
Micron (MU)
Maxim (MXIM)
National Semi (NSM)
Nvidia (NVDA)
Teradyne (TER)
Texas Instruments (TXN)
Volterra (VLTR)


Directed Electronics (DEIX)
Emulex (ELX)
Intevac (IVAC)
Isilon (ISLN)
Lexmark (LXK)
Network Appliance (NTAP)
Sun Microsystems (Java)
Brocade (BRCD)

Goldman previously made similar moves this week in Software:

Adobe (ADBE)
Autodesk (ADSK)
Computer Associates (CA)
Check Point (CHKP)
Citrix (CTRX)
Cognos (CGNS)
CommVault  (CVLT)
Informatica (INFA)
Macrovision (MVSN)
McAfee (MFE)
Oracle (ORCL)
Quest Software (QSFT)
Red Hat (RHAT)
RightNow (RNOW)
Secure Computing (SCUR)
Symantec (SYMC)
Tibco (TIBX)


Netgear (NTGR)
Corning (GLW)
Cisco (CSCO)
Nortel NT)
Aruba (ARUN)
Juniper (JNPR)

Payment processing companies:

Paychex (PAYX)
Global Cash Access (GCA)
Global Payments (GPN)
Master Card (MA)
MoneyGram (MGI)
Amdocs (DOX)
Convergys (CVG)
CSG Systems (CSGS)
Synchronoss (SNCR)

IT services:

Accenture (ACN)
Bearing Point (BE)
Sapient (SAPE)
Affiliated Computer Services (ACS)
Computer Sciences (CSC)
Unisys (UIS)
Cognizant (CTSH)
ExlService (EXLS)
Infosys (INFY)
Patni (PTI)
Satyam (SAY)
Witpro (WIT)


Let me reiterate this: A downgrade on this many stocks is worth noting, but does not mean the world is ending. Experienced traders know to have a plan in effect, to follow their discipline, and to not get panicked into doing something foolish — on the long or short side.


Goldman Turns Wary On Tech Sector; Cuts Estimates, Targets For Dozens Of Stocks
Eric Savitz
Tech Trader Daily, November 30, 2007, 4:25 pm

Goldman Turns Cautious On Software, Citing Macro Factors; Cuts Ests
Eric Savitz
Tech Trader Daily, November 27, 2007, 9:41 am

What's been said:

Discussions found on the web:
  1. Marcus Aurelius commented on Dec 2

    “…Let me reiterate this: A downgrade on this many stocks is worth noting, but does not mean the world is ending. Experienced traders know to have a plan in effect, to follow their discipline, and to not get panicked into doing something foolish — on the long or short side…”

    Don’t panic. Just buy everyone a drink and then move very slowly and casually towards the door. Once you get outside, run like hell.

  2. Stuart commented on Dec 2

    Nah, Goldman would never try to speak its own book….would they.

  3. halbhh commented on Dec 2

    Supposing your time frame is on the order of 1 year (if you’re not a “trader”, etc), then will these stocks fail on average or aggregate to rise at least 4% yoy forward? That’s the question many will ask, and while it certainly isn’t clear, there is a fair chance GS is wrong with their crystal ball. It’s important to be skeptical of analysts. I’d put aside their downgrade (unless you are a trader, in which case it’s a crap shoot), and instead review their thesis.
    “We believe CIOs may delay their purchases in the early part of 2008.”
    Well, a lot will depend on consumer spending this christmas — or simply whether the possible slowdown is significant, or not.

    In other words, GS is just talking their book, a point of view, a guess, for which they can take credit if things go their way, or never mention again if the opposite happens.

  4. Easwar Prasad commented on Dec 2

    The names


    and PATINI are spelled wrongly

    cant you assholes spell correctly ?

    Wonder what makes u so aloof wen u spell indian companies


    BR: How is this for spelling:

    G – O – O – D – B – Y – E

  5. Marcus Aurelius commented on Dec 2

    Dear Earwax,

    Sorry for the laxity. Nothing personal, I’m sure.

  6. Stuart commented on Dec 2

    “GOLDMAN SACHS, October 9, 2001 –
    Recommended List Large-Cap Growth
    Price: US$33.45 Target price: US$48
    Gas & Power Convergence

    Still the best of the best. With perceptions far below reality, we see major catalysts in third-quarter results and increased disclosure in coming months.”

    Nuff said.

  7. mksloth commented on Dec 2

    I guess that should be “Wipro Ltd.” (WIT) and “Patni Computer Systems” (PTI)…

  8. km4 commented on Dec 2

    >Goldman Sachs: Sell Tech Selectively

    Gee what an epiphany….simply amazing that these asshats get paid for this drivel !

  9. Rick45 commented on Dec 2

    “sell selectively,” is this not an oxymoron? Sort of like Gold going to $ 660 next year, my god is there no shame in mudville?

    speaking of morons, GS’s level 3 is top-heavy.

    Just more cabal-pumping….

    $ 175 puts for ’08 looking tasty!

  10. Rick45 commented on Dec 2

    p.s. thanks for all your work Barry, without you, Mish, Russ Winter, and Calculated Risk, cant imagine how “normal” all of the cabal-pumping would look.

  11. samsin commented on Dec 2

    I wonder how many shares of AAPL they own? Wouldn’t they be affected by a downturn in consumer spending – especially if Intel is on the list?

    Or maybe Goldman Sachs has made plenty of money on Apple since 2004 and doesn’t want to drive its value down too much. Then again Apple is one of the few genuine success stories of the decade so far.

  12. Winston Munn commented on Dec 2

    Odd, my trades this year have run about 98% short sales to 2% longs and I’m up 25% for the year. Maybe The Apprenticed Investor series could help.

    Or there is a book I could suggest – Asshats and Ogres…

    I have a pool and a pond…the pond would be good for you…

  13. Stuart commented on Dec 3

    BR: E – X – C – E – L – L – E – N – T

  14. Winston Munn commented on Dec 3

    My last post on the Asshats and Ogres book was directed to a now-deleted post’s author – sorry for the interruption – we now rejoin our regular blogging already in progress.


    BR: Yeah, that creep had to go — I gave him the benefit of the doubt (nor more!).

    My new rule is if your 1st comment reeks of asshattery, you’re gone!

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