Microsoft and other tech dinosaurs rallyApril 10, 2013: 12:23 PM ET
Dinosaurs are extinct. But dinosaur tech stocks? They're thriving lately.
Microsoft (MSFT) was up 2% Wednesday and shares passed $30 for the first time since October. That move comes after a nearly 4% rise on Tuesday. Intel (INTC), the chip yin to Microsoft's operating system yang in the Wintel PC market, rose 3% Wednesday. It was up 3% Tuesday too. And Cisco Systems (CSCO) followed up a 2% pop on Tuesday with a 2.5% pop on Wednesday.
What do these three techs have in common? They're all members of the Dow Jones industrial average. They are older and more established (a nice way of saying mature) companies. And they pay dividends. Big ones, in fact.
Microsoft and Cisco have payouts that yield more than 3%. Intel's yield is above 4%. By way of comparison, the supposedly safe 10-year U.S. Treasury note yields just 1.8 %.
Several traders on StockTwits suggested that the rally in Old Man Tech could continue, especially since investors are desperate for income in an environment of unusually low interest rates.
It is stunning to see. For a second there, I thought it was the mid-late 1990s. (Ahh ... to be in my 20s again. But I digress.)
Not even an analyst downgrade of Microsoft was enough to deter investors Wednesday. BGC Partners cut its rating on Mister Softee to hold. The reason? The fact that the PC industry is in "turmoil." That isn't exactly news though. So maybe that's why traders were willing to ignore it?
That may be true. But BGC does have a point. The PC market is in flux. There's a reason why Dell (DELL) is trying to go private. And I'm still perplexed as to why Hewlett-Packard (HPQ), another dinosaur tech that pays a decent dividend, is up as much as it is this year.
Seems like some traders agree with me. A few think that like all good momentum plays, the recent spike in Microsoft (and perhaps other techs) could soon come to an end.
Ha! Odds are you may be viewing those commercials on YouTube while using the Chrome browser. Google (GOOG) really is the new Microsoft. It's the one with all the power and momentum.
Finally, one StockTwits user pointed out that Microsoft, Intel and Cisco aren't the only "old" techs rallying lately. Apple (AAPL) has finally shown some signs of life again. And even though you could argue that Apple has more growth potential than other big techs, many investors are still treating Apple as if its best days are behind it.
It's funny how Tim Cook has all of a sudden become a CEO that investors love to hate, much like Ballmer.
For what it's worth, Apple also pays a healthy dividend -- even though some want the company to use that $137 billion in cash to boost the payout. So forget about the old (literally) Four Horsemen of Tech. Maybe Apple, Microsoft, Intel and Cisco are the "new" Four Geezers of Tech?
As long as they keep paying dividends, investors might not care what silly nicknames people like me have for them.