A Guide to Investing in the Top US Tech Companies
December 2, 2016
When thinking about tech companies, there are certain big names that first come to mind – Google, Facebook, Amazon, etc. But when it comes to investing, how do you know where to start? What are the types of strategies should you be looking at? Luckily we have some tips and tricks around how you should be looking at your data to help make profitable decisions.
These tech giants are bringing in billions in revenue every year, but also amassing large amounts of debt. In order to keep up in the fast paced tech industry, companies must always be innovating, which is not cheap. There are two main strategies, investing in R&D or acquiring strategic technologies. As an investor, you should be looking for companies with a high quick ratio, which compares their current assets versus liabilities. A high quick ratio will allow a company to invest in future innovation, which will lead to continued growth.
We wanted to look at which of the largest US tech companies are in the best position for future growth. We used Buycel’s spreadsheets and custom formulas to pull the latest data from SEC filings for current assets and liabilities of 10 different companies. This analysis takes seconds to perform, yet is able to quickly differentiate companies.
From the spreadsheet, we were able to distinctly see the companies that are best positioned for future growth. Based on this data, we can expect to see acquisitions and new technologies from Apple, Google, Facebook, Microsoft, and IBM due to their strong balance sheet. Amazon has been reinvesting their earnings in order to dominate the online shipping market. They are not shy about incurring short-term losses to continue growth and development. Verizon, AT&T, Comcast, and Walmart all have racked up enormous debt without the corresponding revenue. These companies have participated in numerous acquisition attempts (DirectTV, Jet.com, Yahoo, Time Warner), but from an investment perspective we have not yet seen the benefits. Current assets versus liabilities shows a bigger picture when you are looking to invest in tech companies. Obviously, more detailed analysis is required before making an investing decision, but this quick analysis provides a good starting point.
Get started with Buycel today and you’ll be able to do this and much more detailed analysis.
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