Bargains in the Technology Trashcan

As most stocks/companies in the technology universe have been going through weeks of trashing from all of the media outlets, I see some of the best long-term investments taking shape. If you look beyond the doom-and-gloom being predicted by all of those who are supposed to know about technology, there is a lot of money to be made, and with relatively safe investments.

We focus on insider trading, and so all of the companies I’ll identify here are technology companies which have seen some very good purchasing recently. However, to kick it up a notch, I wanted an added level of security, call it a back-stop if you like. On top of the insider purchasing, I’m only going to provide those technology companies with insider buying, are posting profits,  and are paying dividends. I’ll call this the Technology Investment Trifecta!

What’s the biggest issue plaguing the technology companies today? If you believe the IT technorati who are supposed to know better, you’d think it’s the complete demise of the PC business, along with near obliteration of every device which does not begin with a lowercase “i”. The fact of the matter is that mobile and iDevices may be able to provide a good portion of what consumers need in a computing device. However, there are things which that mobile device will never be able to do (well) and so a home-based PC is still going to be required. Further, in the office, it will be a decade or more before you see iDevices or Apple products making any major dent at the employee desktop. Lastly, Apple products will likely never be running corporate data centers. I won’t go in to all the details regarding my points here, but, personally, I have 25 years experience in IT, so my view is well-founded.

In any case, let’s get to those technology investments that might make us some money and with a low amount of risk because they meet my TIT criteria. These are not presented in any particular order, all meet the TIT criteria, and should be investigated further for your own investment potential.

Symbol Company Share Price 52 week hi/lo Dividend Yield Last Insider Purchase
CY Cypress Semiconductor $9.54 $20.42 / $9.43 4.6% 10/24/2012
DELL Dell Inc. $9.41 $18.36 / $9.11 3.4% 2/23/2012
MSFT Microsoft Corporation $28.83 $32.95 / $24.30 3.2% 5/8/2012
HPQ Hewlett-Packard Company $13.61 $30.00 / $13.60 3.8% 6/5/2012
ADTN ADTRAN Inc. $17.61 $38.95 / $15.38 2.0% 7/15/2012
NATI National Instruments Corp $23.41 $28.98 / $23.13 2.4% 10/31/2012

Now, I’m not advocating anyone go and blindly purchase this basket of potential technology Easter Eggs. However, considering that these companies are surely not going to disappear anytime soon, they are paying good dividends considering the interest rate environment, they are (currently) all profitable, they are all leaders in their segments, and they have senior management willing to invest their own money purchasing the shares, they warrant a good objective look.

The stocks/companies I’ve provided are just a few which meet my TIT criteria. There are a bunch more where the only thing missing is the insider purchases – they have been beaten up, they are profitable, and paying dividends. You can use a stock screener on one of the major sites (e.g. to scan for those if they are of interest.

Lastly, as always in my book, if you do buy any of these, never plow all-in with one purchase. Be patient and take a small position. If the stock trends lower, buy some more. If your research is good and you believe the stock/company is undervalued, then look at it as a gift that the price might go lower before the rest of the market realizes what you already have. The market can be irrational a very long time. If you invested a large amount at one time, you can be easily scared out of your position. Play it safe and never invest too much in one security or at one time – you’ll sleep much better, and likely see better returns over the long-haul.