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.

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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.)

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Tickers in this Article: VHC, CSCO, AAPL, MSFT, KEI, DHR, ISLN

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