Welcome to Week 18 of the Big Idea Portfolio. Enthusiasm for Apple (NAS: AAPL) shares waned and Riverbed Technology (NAS: RVBD) fell further into value territory as my portfolio gave back 2 percentage points in this three-year contest. Details on these companies and more in a minute. First, let's dig into the numbers:
S&P 500 SPDR
Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.
Even though Apple blew away estimates last quarter, investors spent most of the past week taking profits. Analysts aren't so bearish. One, in particular, now says we shouldn't be surprised to see Apple become a multitrillion-dollar company. Berkshire Hathaway chairman Warren Buffett also said he wouldn't be surprised to see the Mac maker outperform over the next decade.
Yet Buffett also said he wouldn't buy. Why? He doesn't understand the business well enough. Buffett also cautioned against shorting Apple, which is up roughly 39% year to date. (Get a full rundown of what Buffett and Munger said about Apple and Google.)
Riverbed, meanwhile, saw its shares decline ahead of this week's product rollouts at the annual Interop trade show in Las Vegas. The show, which highlights advancements in network and Internet technology, will see Riverbed competing with peers for technical recognition for some of its newest gear. The Steelhead Cloud Accelerator, developed in concert with Akamai Technologies, is among the three "Best of Interop Awards" finalists the company revealed in a press release.
In earnings news, LinkedIn (NYS: LNKD) destroyed estimates. First-quarter revenue doubled to $188.5 million, while adjusted profits zoomed 191% to $0.15 a share. Analysts had been expecting $0.09 a share on $178.6 million in revenue. Calling this company a social network is simply wrong; LinkedIn is an increasingly valuable data provider employers have come to depend upon.
Finally, on Tuesday, Research In Motion (NAS: RIMM) talked up the new BlackBerry 10 mobile operating system, featuring the sort of virtual keyboard the iPhone and Android devices have had for years. Whoops. The stock fell 5% the day following the unveiling and is down more than 17% year to date.
At just 5 times trailing earnings and less than 7 times next year's profits, RIM is flirting with deep value territory. But is the stock really a bargain? I've serious doubts existing profits are sustainable when Apple, Google, and the new team of Microsoft and Nokia are after its core business.
The week that was
So much for the rally. Investors took to the hills last week as the Nasdaq (INDEX: ^IXIC) fell 3.7% and the small-cap Russell 2000 dropped more than 4%. The S&P 500 slipped 2.4% while the Dow fell a more modest 1.4%, CNBC reports.
Poor payroll results didn't help much. Employers added just 115,000 jobs in April, far less than the 170,000 expected per a Reuters survey. Oil prices also dropped below $100 per barrel, and fear as measured by the CBOE Volatility Index, or "VIX," rose 17% for the week. The message? Investors aren't yet sure about committing capital in this market environment.
See you back here next weekend for more tech-stock talk. And remember, there are many growth opportunities out there outside the technology sector. We've outlined a few of our favorites in the Fool's latest special report -- "These Stocks Could Skyrocket After the 2012 Presidential Election." Also be sure to add the Big Idea portfolio stocks to your Foolish Watchlist for ongoing, up-to-the-minute coverage. Both the report and the Watchlist are 100% free:
At the time thisarticle was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Berkshire Hathaway, Google, Rackspace Hosting, Riverbed Technology, and salesforce.com at the time of publication. Check out Tim'sWeb home,portfolio holdings, andFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Apple, Berkshire Hathaway, salesforce.com, Google, Microsoft, Riverbed Technology, and LinkedIn.Motley Fool newsletter serviceshave recommended buying shares of Rackspace Hosting, salesforce.com, Berkshire Hathaway, Nokia, Google, LinkedIn, Microsoft, Riverbed Technology, and Apple, creating bull call spread positions in Microsoft and Apple, creating a bear put spread position in salesforce.com, and creating a synthetic long position in Riverbed Technology. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.