Our readers know that the technology sector holds some of the most exciting and lucrative profit opportunities, which is why we're constantly asked, "What are the best investments in tech right now?"
Tech is the largest single segment of the market. But more importantly, it's the driver of innovation and invention that leads to a steady stream of progress and fascinating new products.
Despite its promise, not all tech stocks have performed as well as the broader market in 2013.
The Standard & Poor's 500 Technology sector is up just 7.4% year-to-date, compared to the S&P 500 Index's 13.9% gain. Blame Apple Inc's. (Nasdaq: AAPL) struggles and fall from grace (shares are off some 40% from its September high) for S&P tech stocks' muted showing.
However, when looking at a wider picture, tech's performance since the start of the year is robust.
Indeed, average gains for tech stocks in the Russell 3,000 are 21.9%. The broad based Russell 3,000 is made of up all Russell 1,000 (large and midcaps) stocks and Russell 2,000 (small caps).
Following are few examples of the explosive growth enjoyed by tech industry winners so far in 2013:
- SunPower Corp. (Nasdaq; SPWR), an integrated solar product and solution company, up 331.85%.
- SunEdison Inc. (Nasdaq: SUNE), a manufacturer of semi-conductor and solar energy materials, up 166.36%.
- Hutchinson Tech. (Nasdaq: HTCH), a disk drive manufacturer, up 143%.
- Responsys Inc. (Nasdaq: MKTG), an email-cross marketing solutions company, up 139.93%.
- Parkervison Inc. (Nasdaq: PRKR) a maker of proprietary radio frequency technologies (RF) and products for use in semiconductor circuits for wireless communication devises, up 134.24%.
Finding the best investments in tech that offer this eye-popping upside aren't easy to identify without some expert help.
And, tech stocks like these are notorious for being extremely volatile. True, they can go up like a rocket, but they can also come crashing down equally as fast.
Some analysts warn parts of the tech sector are in for a few more rocky quarters as economic uncertainties hang overhead and forecasts call for lower sales in certain industries.
PC sales fell 14% in the first three months of 2013, reports research form IDC. The kind of slide and marketplace shift is behind Michael Dell's quest to take his namesake company private so he can re-invent Dell (Nasdaq: DELL) beyond a PC maker.
Shifting consumer behavior also hit sales of Microsoft Corp's (Nasdaq: MSFT) Windows 8.
That's why it's important for investors to make informed decisions when picking the best investments in tech. High-flyers and hyped stocks are tempting, but fundamentals, earnings and the need for a product should be the true lure.
It's amazing how many investors pump thousands of dollars into a company they know little about. What are its earnings? What about sales?
And remember, in the long run, you are investing not in a product, but in a company. Financials, P/E, debt, cash flow, yield, market cap and more ought to be considered. History confirms the most successful investors choose stocks based on fundamentals and financial criteria-not speculation.
Need I remind you about the dot.com boom and bust of the early 2000s?
That's why we track the everyday developments in tech stocks for our readers.
Money Morning's Tech Specialist Michael A. Robinson, who analyzes the best tech investments in his biweekly reports, has recently shared with investors "the only tech stock you'll ever need."
This stock highlights some of the qualities that investors should look for when hunting for tech profits that will make money now, today...
Robinson explains it's a "big-cap juggernaut that provides stock profits to its shareholders while it's busy inventing the tech of the future. And it isn't satisfied pigeon-holed into one specific sector but has its sights on so many diverse industries."
The tech investment he loves?
Google Inc. (Nasdaq: GOOG).
"Unlike many tech leaders, it isn't sitting on its laurels and market dominance," Robinson wrote to Money Morning members earlier this week. "It's actively looking into cutting-edge sectors to advance its brand. What's more, its product pipeline is blazingly fast and efficient.
"The founders of Google are nothing if not visionary leaders with solid business chops," explained Robinson. "They want to move far beyond search results and advertising and Android and tablets and operating systems and social networks to become the company of the future.
"In fact, Google already ranks as a leader in one of the hottest -- and most profitable -- tech fields today and one that will dominate the next decade: mobile computing," said Robinson.
For his full outlook on why Google is one of the best investments in tech now, check out Robinson's The Only Tech Stock You'll Ever Need
- Money Morning:
Why This Tech Blue Chip is Poised to Double
- Money Morning:
Here's the Secret to Uncover "Hidden" Tech Winners
- Bespoke Investment Group:
2013's Top Stocks... So Far
- The Telegraph:
PC sales down as Windows 8 fails to excite