Who wants technology stocks in a down market? Just as how people act when their money is under pressure, purchases like technology take a backseat to more important matters. With the exception of a technical bounce here and there, most markets are in risk-off mode, which means a global snubbing of noses to tech giants.
Let's not forget Facebook (Nasdaq:FB). The stock that was supposed to breathe new life into the tech sector has, so far, joined the many other less-than-stellar IPOs of the past few years.
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But does that mean that tech isn't worth our time or money? In every sector there are standouts and tech is no exception. If you're looking to put some money into technology, here are a few ideas to get you started.
Investors keep waiting for this old technology name to go back to being the large, not-so-exciting name that it was for so long, nonetheless Intel continues to be a favorite of investors. Thanks to its line of ultrabooks, as well as other products, its stock is up about 20% in the past year compared to the S&P, which is nearly flat. Add to that a 3.6% dividend and it's hard not to like this name.
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Facebook was long-seen as the benchmark for technology growth but don't count out Oracle, a company that grew its market share faster than Facebook in 2011. This software maker has an 11% share of the market and a lot of cash on its books. Oracle has seen a gain of about 25.26% year to date and pays a nearly 1% dividend.
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If you want technology, head to the cloud and all of those that produce products and services that cater to the cloud. EMC is one of those companies and although it's lost a large portion of it's 2012 gain, EMC is still up more than 20% year to date. Thanks to its cloud offering, EMC is still one of the best positioned companies to profit from the cloud.
What's an iPhone without cell service? How useful is the Android phone if Wi-Fi is your only option? Companies like Verizon are quickly transforming from a discretionary item to a staple. Add to that its other services and it's easy to see why this stock has been in a strong uptrend since April. Is now the right time to buy? Savvy value investors might wait for a lower entry point, but don't forget about the impressive dividend that is currently well north of 4%. As mobile continues to overtake traditional computers, look for companies like Verizon to benefit greatly.
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Visa may seem more like a financial company, but payment processing is technology at its finest and there's no doubt that Visa knows how to do it. The company processes payments worldwide and holds the majority of the market share in a space where credit cards are still mainstays in most consumers' wallets. With a gain of over 20% year to date and a 0.70% dividend, this name continues to outperform its competitors.
The Bottom Line
Tech isn't at the top of most investors' lists right now, but there are names within the space that remain attractive or represent a great value for investors as they wait for the risk on trade to return. As always, use articles like this as a jumping-off point for your own research.
At the time of writing, Tim Parker did not hold stock in any of the companies mentioned in this article.