Alternative Market Briefing

Comment: Four ways to drill down into tech

Thursday, October 19, 2017

Matthias Knab, Opalesque:

Although tech valuations are elevated, many top tech companies have robust earnings growth, strong balance sheets and growing dividends.

In order to follow the innovation of the sector, investors might want to consider data analytics, cloud computing, cyber security, and semiconductors.

Four ways to drill down into tech

The growth prospects of technology are easy to imagine. What's more challenging is how to invest thoughtfully across the sector. We find that several developments in the sector might be worth particular consideration:

Data analytics

Cloud computing

Cyber security

Semiconductors See chart on Harvest [via Source link below]: Relative performance of U.S. technology sub industries to S&P 500

Valuations elevated - for good reason

While it's true that tech tends to trade at a premium, we are far from a dot-com bubble repeat, in our view. Many of today's tech companies feature robust earnings growth, strong balance sheets, and growing dividends. What's more, tech is currently one of the few sectors with a strong secular growth profile. Innovation doesn't ebb and flow with market technicals - it is a structural, disruptive force, permanently separating winners from losers. In that light, we believe i......................

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