MGI Research Database - Recent Ratings

This report provides a detailed overview of the MGI Research Database of MGI scores for 53 companies as of the June 2009 quarter representing the hardware, internet, networking, semiconductor, software and storage sectors. In addition, MGI analysts provide “outlook” ratings of positive, neutral or negative for a number of these same companies.

Excerpt: MGI‐X scores in the June 2009 quarter have shown improvement although the performance is still uneven. MGI‐Change Vector which is a derivative of MGI‐X and indicates whether the MGI‐X score is strengthening or weakening also showed signs of improvement. For the normalized quarter ending in March 2009 we saw a majority of companies registering a negative MGI‐CV, however for the June 2009 quarter with 51 scores tallied and 2 that will be attributed to September 09, the ratio has reversed with 53% of the companies scored having a positive MGI‐CV. One important note is that when we look at the underlying financial detail (remember MGI‐X and CV are calculated using 8 years and 8 quarters of data from the income statement, balance sheet, and cash flow statements) the improvements are almost entirely attributable to expense controls and management of the balance sheet, rather than a return to positive revenue growth. From an investor point of view, we’ve seen a dramatic recovery in technology stocks in general. As we highlight in an accompanying note, where initially the rally in technology stocks was limited to the stronger companies (ones we define as Market Leaders, based on extraordinarily high MGI‐X scores), more recently everything has participated including a strong performance by the “at risk” companies. The broadening confidence has been reinforced by the spate of technology mergers announced during the past several months. While we are encouraged by the direction of MGI scores generally, with the September quarterly earnings season upon us, we would be highly selective and focus our attention on the highest quality/high MGI companies – since a divergence in performance between high and low quality companies is inevitable given the indiscriminant rise in tech since March.

Report Length: 5 pages

Companies and sectors covered: AAPL, DELL, HPQ, IBM, TDC, AKAM, EBAY, GOOG, YHOO, BIDU, COMS, CSCO, JNPR, MOT, NOK, PALM, QCOM, RIMM, RVBD, ADI, AMD, INTC, TXN, ADBE, ARBA, BMC, CA, CPWR, EPIC, ITWO, JDAS, MANH, MCRS, MFE, MSFT, ORCL, PMTC, QSFT, QSII, RADS, SYMC, VMW, XATA, BRCD, CML, CVLT,DBTK, EMC, NTAP, PAR, QTM, STX, WDC)  SaaS, ERP, CRM, Systems Software, Internet, systems hardware, storage, networking