6 Under The Radar Tech Stars Outpacing The Market

While the mega cap FAANG group of technology companies has been grabbing much of the attention, and money, of investors, a number of lesser-known tech stocks have also been delivering market-beating performance in recent years. To find such under-the-radar winners, MarketWatch columnist Philip Van Doorn looked at the largest 10 or 11 holdings in each of 5 top performing technology mutual funds. All these funds have received 5-star ratings from Morningstar Inc. and have outperformed the S&P 500 Information Technology Index (S5INFT) over the past 5 years, with cumulative total returns after expenses of up to 241%, versus 176% for the index.

Under-The-Radar Tech Stars Vs. FAANGs

Stock Ticker YTD Gain Principal Businesses
Walsin Technology Corp. 2492.Taiwan 271.4% Passive electronic components
Sino-American Silicon Products Inc. 5483.Taiwan 61.2% Silicon wafer bases for chips
Adobe Systems Inc. ADBE 36.9% Creative software
Intuit Inc. INTU 29.3% Accounting software
Autodesk Inc. ADSK 24.2% CAD/CAM software
Akamai Technologies Inc. AKAM 11.4% Content delivery network
The FAANGs:      
Facebook Inc. FB 11.2% Social media
Apple Inc. AAPL 9.6% Devices and software
Amazon.com Inc. AMZN 45.5% E-commerce, cloud computing
Netflix Inc. NFLX 106.0% Video streaming
Alphabet Inc. GOOGL 7.0% Information services

Sources: MarketWatch, Bloomberg; data through June 28. Walsin and Sino-American gains computed in Taiwan dollars.

Cloud Computing Players

Both Akamai and Intuit are riding the secular growth wave related to cloud computing. Akamai is a content delivery network (CDN) that puts internet-based content closer to the user, improving access speeds. Intuit is known for its tax preparation and accounting software, which it now is delivering through the cloud. (See also: 6 Cloud Stocks Poised for Rapid Growth.)

Akamai's shares are down by 12% since June 20, after lowering its guidance on second quarter results, per another MarketWatch story. It has dropped its EPS guidance from a range between 79 and 83 cents to one between 79 and 81 cents. Its revenue guidance fell from a range between $658 million and $670 million to one between $658 million and $663 million. The company cited the strengthening dollar as a headwind. Nonetheless, analysts are calling for full year EPS gains of 28% in 2018 and 15% in 2019, also per MarketWatch.

Regarding Intuit, analysts foresee a 26% rise in EPS for 2018, and an 18% boost in 2019. The company's fiscal third quarter EPS beat analysts' estimates by 3%, as reported in a third MarketWatch story.

CAD/CAM Leader

Autodesk is an established leader, founded in 1982, in computer-aided design (CAD) and computer-aided manufacturing (CAM) software. Companies in a variety of industries use such software to automate their design, engineering and production processes. After recording a loss in 2017 of 50 cents per share, the consensus EPS estimate for 2018 is a profit of 91 cents followed by $3.20 in 2019, per MarketWatch.

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