Tech Stocks Look Like a Moderate-Risk Buying Opportunity

Brittney Barrett |

Markets regained a considerable percentage of Monday’s losses in yesterday’s trading. Investors are split on whether or not this represents a new direction for the market or whether the recent activity was a short-term ditch effort to take a risk on bargain stocks. Either way, it should be acknowledged that challenges continue to exist for the economy, especially in the financial sector, which reversed a large chunk of Monday’s losses. So is there a way that acknowledges these challenges while still allowing for major margins? Yes. One moderate-risk stock group that is rising in appeal is the tech sector. The technology companies do have more exposure to the debt-ridden Europe than others, but strong balance sheets and impressive price/ earnings multiples increase the draw of these companies. Among those within the sector that look appetizing right now are Motorola Solutions Inc (MSI), Hewlett-Packard (HPQ), Apple (AAPL) and Amazon (AMZN).

1) Motorola Solutions Inc (MSI): Communications company, Motorola is a massive enterprise with a shareprice that has been depleted with the direction of the market. Motorola is now hovering less than 10 percent over its 52-week low in spite of nearly doubling net profit from the year ago period. The earnings represent a positive direction for Motorola and while shares have edged back in recent trading, they are still a deal when factoring in the 10-plus percent loss endured over the last week.

2) Hewlett Packard (HPQ): Hewlett-Packard is another company that is struggling from perception more than internal deficiencies. While Packard has faced challenges, they have been compensated for in the current share price. The company is currently selling seven times beneath projected 2011 profits and has an attractive 4 percent yield that should entice shareholders.

3) Apple (AAPL): Apple recovered somewhat in trading and while it doesn’t have the major bargain appeal of Motorola it offers a discount from 52-week highs. People buy Apple, they see it as a trusted stock and with each new debut, share prices tend to climb. When the market is shaky, many look to it as a long-term source of portfolio stability. That said, this investment is less risky than those above it but is more likely to offer a predictable outcome long-term.

4) Amazon (AMZN): While all the other shares were declining over the past several weeks, Amazon was busy hitting its all time high on July 28th. Driving the share price up was a stellar earnings report that could mean the company would climb past its 52-week highs later in the year. Taking advantage of the towering share prices, investors sold hard near highs on Monday, causing the company to tumble on the basis of fear.  It’s begun to climb back up again but still has a way to go until it reaches 52-week peaks.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 112.71 -1.91 -1.67 52,481,151
AMZN Amazon.com Inc. 805.75 1.05 0.13 2,353,511
HPQ HP Inc. 15.09 -0.03 -0.20 8,102,240

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