Earnings season is here. Actually, it's been here for a while, but didn't get into full swing until this week. Is there anything we can glean from the early numbers? There sure is - we'll talk about it below, before we get to our feature 'Time to Downsize Computer Hardware Stocks'. Let's just say the recent investor focus on the technology sector is smart, but they're acting on the idea with the wrong stocks.  First though, let's look at the best of this week's community comments. On tap for today are thoughts on Labopharm (DDSS), Pacer International (PACR), Ultra Clean Holdings (UCTT), QuickLogic (QUIK), and Denny's (DENN).   Stocks In Focus Three Stocks Return with a Vengeance: GFRE, NPSP, PACR  Looking for a stealthy recovery play? Dennis Askew may have found it in Pacer International, Inc. (NASDAQ:PACR). The shipping company's got great intermodal capacity, which is where the bulk of transportation growth seems to be. That budding growth paired with a couple of shake-ups within the management pushes Pacer International to the top of a brief 'buy' list. Overbought & On the Verge - Reviews of CIGX, DENN, & OCLR It was only yesterday that James Brumley identified the proverbial last straw for Denny's Corporation (NASDAQ:DENN). As it turns out, his line in the sand - the 20-day moving average line - was eclipsed today. Denny's long holders, you've been warned. Anyone looking for a short trade, on the other hand, just got a green light. Where to Look for Bargain Prices: ARRY, ROIAK, QUIK  QuickLogic Corporation (NASDAQ:QUIK) was deemed a short-term 'buy' by Dennis Askew this morning, who recognizes that the company has proven itself to be very adaptive (and quickly so) with its cell phone and smartphone display controller technology. QuickLogic is close to new 52-week highs. Two Out of Three Isn't Bad - Looks at CRXX, DDSS, & RMIX  In almost the blink of an eye yesterday, Labopharm Inc. (NASDAQ:DDSS) went from being a stock that was more than content just to sit idle, to a real mover with tons of potential. As for how to handle the excessive breakout from Labopharm though, James Brumley has a reality check for the chart. Why These Undervalued Stocks Keep Climbing: NBIX, UCTT, BRKS  Despite hitting new highs recently, Dennis Askew still feels Ultra Clean Holdings, Inc. (NASDAQ:UCTT) is undervalued, and is a 'buy' even at current prices. Why is that? In simplest terms, Ultra Clean Holdings is on the right place at the right time.... a semiconductor equipment manufacturer while demand for chips is swelling. Check out the numbers.   Earnings Scoreboard Although Alcoa's (AA) earnings announcement is generally considered to be the official kickoff of earnings season, the truth is, several important companies report quarterly numbers before Alcoa does.... enough that between them and all the ones from this week, we can get a pretty good feel for how things are going to go this time around.  And so far, we've seen more 'beats' than 'shortfalls'.  Going back to March 29th [some fiscal quarters end in February, making this timeframe possible], among the major names with earnings announcements, we've seen 118 'beats', 17 'mets', and 90 'misses'. Proportionally, that's 52%, 8%, and 40%, respectively.  At first glance, more beats than shortfalls offers encouragement. However, considering we saw 68% of stocks 'beat' last quarter (and about 80%, if just looking at large caps), some might consider this earnings season a little disappointing so far.  Just for reference, the S&P 500 is expected to have grown earnings by 37% in the first quarter of 2010, on a 10% increase in quarterly revenue.  Don't be overly impressed by that pending earnings growth though. If the financial stocks are taken out of the equation - which had little to no earnings in the same quarter a year earlier - earnings growth should only score in the 27% range. Still...    Time to Downsize Computer Hardware Stocks Although we don't get to talk about it as much as we'd like, one of the primary reasons this site exists is to hunt down the best of the best investment opportunities out there.... which usually aren't large caps. How different can a small company and a large company be? You might be surprised. Even within the same industry, the disparity between large and cap small cap corporate performance - as well as stock price trends - can be stunningly different.  Right now, one of the stark difference between large caps and small caps within the same industry is that most large caps are alarmingly overbought, while many small caps are barely out of their oversold condition.  Take today's focus industry for example.... computer hardware. The S&P 600 (small cap) Computer Hardware Index is up 149% since last March's low. That's a red hot run, and on the surface may suggest the group's stocks are overbought. But, with a quick look at the chart, we can see these small cap hardware stocks only recently broke out past a major resistance line. Yet, they're nowhere near 2007's highs.  Now contrast that with the S&P 500 (large cap) Computer Hardware Index, which is 'only' up 100% since last March, yet is - incredibly - well above any prior high we've seen from this index. What the market is telling us is these large cap tech stocks are, or soon will be, worth more than they've ever been before.  Folks, we see the recovery gaining momentum every day, but to price large cap tech stocks in post-recession-2010 at values greater than they were trading at in late 2007 is just asinine at this point in time.  The point we're making and the question we're answering are one and the same.... where are the real opportunities now (not where were they last year)? Large cap hardware stocks have to be getting tired, while small cap computer hardware stocks appear to just be getting started with their move. It may be worth specifically fishing out a small cap tech stock or two to replace the large cap tech name you've been mulling taking profits on.    We Value Your Feedback Got comments, questions or suggestions? 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