Tech Stock Pulse Check: Jan 2022

Weekly updates on the innovation economy.

Overview

As a new part of Drawing Capital’s newsletter, we’ll be providing a monthly snapshot of popular technology company stocks. Readers and investors often ask for a “pulse check” on these parts of the market, so we now intend to provide that value at scale. Even if investors don’t have direct exposure through individual stocks, several of these names are present in popular ETFs, mutual funds, and stock market indices.

Company Cohorts

Cohorts are broken down into three categories: FANGMAN, Large Technology Companies, and Software Companies. The companies that comprise each category are as follows:

FANGMAN Companies

Large Technology Companies

Software Companies

*Note: Market data as of 1/14/2022; some values have been rounded to the nearest whole number for visual clarity. Data is from Koyfin.

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Multiples (EV/ NTM Sales) – Enterprise Value to Next 12-Months Sales

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Percent Below 52-week Highs

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Percent Above 52-week Lows

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Relative Strength Index (RSI) 

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Upcoming Earnings Dates (Jan 2022 - 1st week of February)

Closing Thoughts

• Buying opportunities in the technology sector appear to be increasing.

  • This is especially true for quality companies trading at lower-than-median multiples with consistently strong fundamentals.

  • Recent market volatility in the technology sector, with particular emphasis on the software industry, has given way to more attractive entry points. 

  • Several high-quality software companies are just slightly above their 52-week lows.

  • Using the RSI level as a technical indicator, the number of popular technology companies that are at or approaching an “oversold” RSI level has increased substantially since the end of 2021.

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