With the Nasdaq now closing in on its pre-Lehman crisis highs, the tech sector in general is getting lots of media play. And rightfully so, if one measures success by market leadership. Thus far this year, tech stocks have led all sectors in gains, with nearly half of the top-10 performing issues in 2010 coming from that group. Below, we list the best of them, complete with fundamentals and recent, salient news.

IN PICTURES: What Is Your Risk Tolerance?

Internet Secure
The top-performing Russell 3000 stock of the year is VirnetX Holding Corporation (AMEX:VHC), a company specializing in technologies that secure real-time communications over the internet, including Voice over Internet Protocol (VoIP), instant messaging (IM), streaming video and other mobile services. Year-to-date, the company's shares have climbed 400%, and they still trade with a very handsome P/E of just 10. The company pays no dividend and has recently taken some tech giants to court in a battle over patent infringement.

In cases launched against NEC Corp, Cisco Systems (Nasdaq:CSCO), Apple Inc. (Nasdaq:AAPL) and Aastra Technologies, no verdict has yet been reached. But versus Microsoft Corp. (Nasdaq:MSFT), a settlement was reached that will pay VirnetX $200 million. In return, Microsoft will receive a patent license to use VHC's technology.

Takeover Tussle
The market cap on Keithly Instruments, Inc. (NYSE:KEI) nearly quintupled in 2010, rising 363% to stand currently at $340 million. Largely responsible for the boost in share value was the takeover announcement of the company by Danaher Corporation (NYSE:DHR), a manufacturer of a wide range of professional and medical consumer instruments and products.

Keithly was a good fit, insofar as it manufactures instruments used in testing electronics components. But the takeover bid has met with some legal resistance. Keithly pays a subtle 0.70% annual dividend.

Raising Guidance
Isilon Systems, Inc. (Nasdaq:ISLN) provides clients with Network Attached Storage systems (NAS). The stock is up 290% since the year began, and looks to be headed for bigger gains. The company recently offered Q4 revenue guidance above analysts estimates. Computer infrastructure giant EMC has recently shown an interest in taking over the company, but talks apparently cooled recently over pricing disagreements. Other potential suitors for the company are Dell and Oracle.

The Bottom Line
Tech has been where it's at in 2010, leading the broad market as a sector and, as these stocks show, individually as well. If the bull market continues its ways, tech appears poised to remain a market leader. (Innovations in energy and consumption grow as companies adopt them to reduce costs. See Clean Or Green Technology Investing.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  2. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  3. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  4. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  5. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  6. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  7. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  8. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center