For many investors, tech stocks are the final frontier – unknown, but valuable. We read about the Zuckerbergs and the Gates of the world, and wonder how we can find stocks like that. Tech stocks are difficult because they are applied to many specific industries, most of which we don't use at the consumer level – at least knowingly.
That's why listed below are three tech stocks that we can all wrap our heads around, but can also see a clear road to profits.
"Tech stocks are the final frontier – unknown, but valuable."
Applied Materials, Inc.
With its recent $2 billion share repurchase program, which followed the previous $3 billion stock buyback program, Applied Materials is in good shape. According to an ISS Stories report, further proof came with the executive board's approval of a $0.10 per share quarterly cash dividend for shareholders as of September 15. This is great news for a company's stock prices which jumped 1.23 percent to $24.72 per share recently. It also has held a 2.76 price-to-sale ratio over the last year, with its price-to-book ratio at 4.02 since the first quarter of the year. This has led some analysts to peg its price at year end to be $26.25 per share.
So what does it mean for investors? Well this won't vault anyone to overnight millionaire status, but it is steady. Despite some recent drawbacks, the stock has remained stable over the past year, and with a $1.53 per share boost expected by the end of the year, you could do a lot worse than this company that specializes in semiconductors, flat panel displays and solar photovoltaic industries – all of which are hot right now and will most likely continue to stay that way in the near future.
While not quite as big as Microsoft, LinkedIn has been a fast climber in recent years. Zerg Watch reported that it recently traded at $136.52 per share and trades at an average volume of 2.36 million. So while there are concerns that it has dropped 39.35 percent since the start of the year, it still has a market cap of $18.23 billion with 133.54 million shares outstanding. Further proof that things are going well for LinkedIn came with a recent announcement from its CEO to CNBC.
"LinkedIn delivered strong financial results and growth across our core product lines," CEO Jeff Weiner explained. "As a result of our new mobile experience, members are increasing their activity on LinkedIn, helping drive strong levels of engagement across the platform."
So what does it mean for investors? Well it depends on how you look at LinkedIn. You can see the site traffic and job board are booming. You can also see that there is plenty of room to grow, and luckily enough, it has the outstanding stock volume to do just that. Long story short, it has plenty of value, and in many ways seems to be the future of employment recruiting. LinkedIn just may be worth a look for the short-term.
What can't be said about Microsoft that hasn't already been said about anything great and gigantic? The PC giant is in the elite echelons with Apple as the most recognizable name in tech. According to Zerg Watch, despite recent drops by 0.81 percent, its average volume of shares still has the potential to rise drastically on any given day. A prime example occurred recently when it closed a trading sessions with 28.25 million shares as opposed to 20.21 million shares the day before. Even though it is a tech titan, it has its fair share of sellers because many people unload the stock when things drop, but then buy back on any positive news. Currently, the stock has 7.68 billion shares outstanding with a $405.76 billion market cap. Numbers like those mean there is both stability and room to grow.
So what does it mean for investors? It's Microsoft. If you're buying now, you're not likely to get rich quick unless they release a product that equates to something similar to the iPod back in the early 2000s. But the stock just makes sense. Solid with growth prospects makes it as blue of a blue chipper as any other tech stock.
Tech stocks are never a solid bet. But Microsoft's as stable as they come. It has the leadership and the resources to continue to innovate, so naturally it is a good fit for your foray into tech stocks. But if growth potential in the short-term is what you're looking for, consider Applied Materials and LinkedIn. They vary in degrees of risk, but they certainly have the ability to innovate and grow, which could mean you might actually profit on tech stocks.