Today many industries in the tech sector are in value territory. This fall from grace is apparent in how the firms of the SPDR Technology Selector Fund (XLK) trade at an average 15 price-to-earnings ratio which is only slightly higher than the 14 price-to-earnings ratio of the S&P 500 (SPY) fund companies. Many familiar semiconductor names trade at even lower valuations. Apparently, tech is no longer the darling of investors and the sector has nearly the same valuations as the broader stock market.

Investors can seize the opportunity offered by the market today by reviewing the challenges faced by different semiconductor stocks that are priced as value investments. In particular, semiconductor manufacturers and their suppliers are frequently trading at attractive multiples in today’s markets. Are they value investments or value traps?

PC Sales Slide

The tech sector is recoiling from the third quarter’s blow to personal computer sales. PC sales worldwide declined 8.3% compared with the last year’s third-quarter sales, according to Gartner Inc. market research.

Gartner head analyst Mikako Kitagawa said, “The overall PC market decline was triggered by a continuing slowdown in PC shipments,” and that the outlook for the launch of Microsoft Windows 8 is tenuous because “shipments were less vigorous as vendors and their channel partners liquidated inventory in the third quarter.”

Retailers resisted placing orders because of the weak back-to-school sales. These firms had cleared out their entire inventory before the launch of Windows 8. In contrast, the professional market remained unaffected. To continue reading, click here.

The market is set up for fuel prices to relax from their highs. This is good news for travel-related stocks. We will review online travel search as a business model and consider which of these stocks is most attractive.

Clicks Vs. Bricks

Hotels and airline companies compete against their peers on price. Online search companies compete against each other based on the attractiveness of their platforms. The platform with the most vendors and traffic provides the best environment for search. Online search sites do not compete for vendors, banner ads, or users primarily based on the prices they charge participants. Hotel and airline vendors are more concerned about making sure their prices are seen and purchased by a large number of potential consumers.

In addition to sidestepping head-on price competition, the online search business model requires less capital expenditure. This is great news for investors, who should vehemently hate cash outflows. Since this newer business model is more attractive, investors should be willing to pay higher valuations for online search stocks.

The Case for Travel Stocks: Oil Price Decline and Economic Recovery

Gas prices might be at their 2012 peak in the U.S., but according to analyst estimates they could drop to their yearly lows by the end of 2012. This price drop would rest on dormant oil refineries starting production again. The onset of winter will also decrease miles driven, leading to lower demand.

Prices at oil service stations could fall by as much as 6.3% per gallon, which translates to a final price of about $3.54. To continue reading, click here.

After an extended sluggish period, Kodiak Oil & Gas (KOG) is finally seeing a little investor appreciation. There are many reasons why this should be so, the most obvious being its competitive position on the Bakken, the hottest US play thanks to its oil weight amid continuing natural gas price stagnation. However, its recent numbers are what are really earning the firm attention. For the first nine months of the year, Kodiak’s production averaged 20,000 boe per day. Compare that to an annualized rate that worked out to 600 boe per day as recently as 2009.

To further increase production, Kodiak is continuing its strategy of drilling multiple well pads, with two to four wells to a pad in nearly all cases. The addition of a second drilling crew beginning in October and expected to operate through year end will also advance Kodiak’s drilling schedule considerably, since that addition effectively doubles Kodiak’s drill rate. Paired with its continually decreasing drilling times and healthy drilling inventory, Kodiak is only at the foot of a steep production increase.

Its focus with multiple well pads continues to be in McKenzie and Dunn counties, areas where the firm regularly meets with impressive production numbers. According to Kodiak Chairman and CEO Lynn Peterson, “the well results from each of our operating areas through the fairway of the Bakken oil play continue to be robust and the results are very consistent between the areas…our work could lead to greater resource potential.”

Kodiak’s drilling expenses continue to remain competitive, averaging between $10 million and $10.5 million. To continue reading, click here.

First Solar (FSLR) is not afraid of a little competition, even if it is coming from an industrial behemoth. After initial delays, GE (GE) plans to enter First Solar’s market in 2013 and compete alongside First Solar, the lowest cost producer of solar modules. GE got its hands into thin-film solar technology by acquiring PrimeStar Solar in 2011. First Solar, the maker of cadmium telluride solar modules, has comfortably commanded most of the market, yet it sees upside in the new rivalry. After several years of a knockout battle among solar technologies, cadmium telluride has been given a huge endorsement. Below, I will explain why the rivalry between First Solar and GE could push both stocks higher next year, making now the best time to buy both stocks.

A ratcheting up of the competition is the push First Solar needs to fortify its market position. If it can best its record of pushing solar cell costs below $1 per watt, the grumbling over China stealing market share in solar gear may soon turn to a whimper. With Chinese solar companies commanding about 70% of US solar installations this year, the forecasted loss of market share may not seem so obvious. Unmistakably, this shift in solar market leadership is already underway.

Sliding gross margins are often an indicator that a company is losing market share to a competitor. In a solar market struggling with overcapacity and supply shortages, First Solar’s operational metal stacks up impressively against its Chinese competitors. To continue reading, click here.

People have been clamoring for smartphones ever since Apple (AAPL) introduced the iPhone in 2007. Today, thousands of people carry smartphones or tablets. Now, soon the military may too.

Military operations require dependable information on locations, a way for communicating efforts and a way to share information in real-time – sounds like a regular Saturday night for most people as they use their smartphones or tablets to get directions, meet up with friends, and share pictures of the festivities.

Of course, the military versions of these items are considerably “hardened” and developed specifically for military usage by the Defense Advanced Research Projects Agency (DARPA), but many of the apps carry similarities to those used by civilians, such as DARPA’s custom application that sports Google-like maps based on satellite images.

“Darpa, the defense research arm that contributed to the development of the Internet, has launched an effort called Transformative Apps under which it has developed a few dozen smartphone applications that work on a number of mobile devices it is evaluating,” reports the Wall Street Journal. “In addition to mapping, the apps can do things like identify explosives and weapons and help navigate parachute drops” and they have shown marked success.

“During a battle in a village near Kandahar, Afghanistan, Lt. Kevin Pelletier used a tablet computer with a custom map application to direct soldiers’ movements,” continues the paper. “As thousands of rounds flew through the village near Kandahar, Lt. To continue reading, click here.

Something very interesting is happening in the metals markets these days. Copper prices are up, and the demand for the metal is high despite a dismal global economy. Copper was actually trading at $7,815 a metric ton for three-month contracts on the London Metals Exchange on July 3. The situation was even better in Shanghai, where an October copper contract on the Shanghai Futures exchange was trading at 56,310 yuan, or $8,900 a metric ton, according to Reuters. Reuters speculated that the increased demand was created by an increase in the Chinese Purchasing Managers Index, which expanded at its fastest pace in June. In this article, I will look at how this development could impact copper miners Freeport-McMoRan (FCX), Southern Copper (SCCO), Newmont Mining (NEM), BHP Billiton (BHP), Rio Tinto (RIO), Anglo American (AAUKF.PK), and Barrick Gold (ABX).

Freeport’s stock went up by 3.9% on July 3 and it is easy to see why. The company is in a perfect position to meet China’s increased demand for copper with its Grasberg Mine in Indonesia. The reason for this is obvious the Grasberg mine is located in New Guinea, which means a shorter voyage to China. That gives Freeport an edge over competitors like Southern Copper that have to ship copper half way around the world from Chile and Peru. Even if Freeport has to pay higher excise taxes to the Indonesian government it can still make up profits with lower shipping costs. Therefore Freeport should be one of the first companies to profit from higher copper prices because of its proximity to the biggest copper consumer China.To continue reading, click here.

At best, I am willing to give Netflix (NFLX) a “hold” rating at its current price of around $69. Once trading at over $300 per share in July of 2011, Netflix stock has plummeted to its current level.

Netflix must answer the numerous questions surrounding the company. What lead to the collapse of Netflix stock over the past year and can they fix what was broken within the company? Can the company transform with the ways of the home entertainment industry and the needs of its consumers? Lastly, should Netflix be concerned about the rise of its competitors?

Late in the summer of 2011, company determined they would need a large hike in subscription prices due to contract restructuring with some of its content suppliers. The price increases were in effect starting that September, and many Netflix users responded by cancelling their subscriptions.

CEO Reed Hastings responded by admitting Netflix had handled the price hikes in a poor manner, but made another misstep by declaring the coming spinoff and renaming of the DVD mail service to “Qwikster.” These are just the main events in a series of complications that left Netflix stock spiraling down to $71 while management searched for a fix.

Netflix has most recently responded to its struggles by promoting Cindy Holland to Vice President of Original Content and Content Acquisition. Since consumers have increased their use of the streaming option, Holland’s new job of acquiring content, especially popular television series, is extremely important.To continue reading, click here.

Patent expiriations aside, acquisitions and new drug launches are boosting earnings. In this article, I’ll show how Big Pharma is back, and explain that the proverbial patent cliffs instead are plateaus for specific drugs facing generic competition.

Merck (MRK) beat consensus earnings estimates in the most recent quarter by one cent and continues to enjoy a modest but steady rise in share value, even though its apex breadwinner, Singulair, is winding its way to a U.S. patent expiration on August 3rd of this year. Currently trading at around $39 per share with a market capitalization trending toward $118 billion, Merck CEO Kenneth Frazier seems nonplussed by the looming loss of more than $1 billion in gross revenues generated by Singulair sales. Merck, of course, is not the only big pharma player to face patent expirations on its blockbuster drugs.

Eli Lilly (LLY) faced similar challenges to revenue growth when its U.S. patent on Zyprexa expired October 23rd, 2011. Clearly, a durable competitive advantage for major drug manufacturers must necessarily rely on research and the continuous development of new therapies for life threatening and life changing illnesses. That said, we will examine Merck, Eli Lilly and a couple of other major drug manufacturers that will face expiring patents on best selling drugs. I want to convince myself that Merck CEO Kenneth Frazier is justified in his optimism, so I will take a look at Eli Lilly in the wake of its Zyprexa expiry.To continue reading, click here.