There’s no doubt that Wall Street loves pointing out big-name tech stocks to buy. These are the darlings of Wall Street at this point. They are not only stealing all the oxygen on the financial shows and publications, but they’re also getting all the money.
XOM) — as well as others to make way for more tech.” data-reactid=”14″>And now the Dow Jones Industrial Average has kicked out its longest-standing member — ExxonMobil (NYSE:XOM) — as well as others to make way for more tech.
InvestorPlace – Stock Market News, Stock Advice & Trading Tips” data-reactid=”19″>InvestorPlace – Stock Market News, Stock Advice & Trading Tips
While the titans have their days in the sun, there are some very good smaller tech stocks to buy that are doing some incredible things that for most investors, are hidden in the mega-caps’ shadows.
The six below-the-radar tech everyone should, in my humble opinion, buy are below. They represent companies that are in the forefront of cutting-edge tech from 5G to renewable energy to animal healthcare to venture capital.
- Hercules Capital (NYSE:HTGC)
- BlackBerry (NYSE:BB)
- Telefon AB LM Ericsson (NASDAQ:ERIC)
- Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI)
- TDK Corp (OTCMKTS:TTDKY)
- Zoetis (NYSE:ZTS)
unique opportunities InvestorPlace’s chief technology analyst Matt McCall studies for a living, only those are even farther under the radar.
Lesser Known Tech Stocks to Buy: Hercules Capital (HTGC)
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This firm is structured as a business development company (BDC). Basically, BDCs are kind of like venture capital funds for individual investors. They were set up in 1980 to help investment in developing and distressed market sectors.
One of their big advantages is that by law they must pay out 90% of their profits to their investors, so dividends are usually higher than average. In the case of HTGC, its dividend is currently around 11.6%.
While BDCs can invest in all manner of businesses, HTGC has focused on tech companies that are in the tech sector. Since it’s headquartered in Silicon Valley, that makes perfect sense.
HTGC buys into a company or provides financing. Since 2003, it has worked with more than 500 companies.
I consider HTGC an alternative financial firm (aka, alt-financial) since it provides an alternative way for small to mid-sized companies to access capital without going through a bank or traditional financing arrangement.
The goal is to provide financing and help with leadership of these firms and then as they grow, either help exit when the firm goes public or is sold to another firm. HTGC has a great track record. And investors get access to a portfolio of promising tech firms — life sciences, SaaS, renewables — in one stock.
novel coronavirus pandemic because there’s concern for its portfolio companies defaulting. However, those fears are passing and HTGC stock is making a comeback. Its dividend helps buy investors’ patience at this point.” data-reactid=”61″>HTGC has been hit during the novel coronavirus pandemic because there’s concern for its portfolio companies defaulting. However, those fears are passing and HTGC stock is making a comeback. Its dividend helps buy investors’ patience at this point.
Source: Michael Vi / Shutterstock.com
You may remember this company for its signature full keyboard smartphones, back before the iPhone was even a thing.
Granted, that aspect of the business is gone — although the phones are still built under license by another firm again. But what was always a unique value proposition for the company was its underlying network security.
BB was a big hit with business people because it was so secure and reliable, wherever you were in the world.
And that piece of the business has carried on. Today, it’s one of the leading cybersecurity providers to the growing 5G and smart/autonomous vehicle sectors. Its secure networks are crucial for both industries and few firms have been doing it as well or as long as BB. And its patent library is huge and woefully undervalued.
But if you’re looking for a play on the future of mobile technology, Matt McCall has identified a company producing a product that will change the face of communication as we know it.
BB stock is off year to date, but it has far less downside risk than it does upside opportunity at this point. Sales are up, and the stock is value bargain.
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Another name from the dotcom heyday, this company was best known to consumers as a leading mobile phone maker when the mobile revolution was in its early days.
But what consumers didn’t understand back then, and only a few more know today, is that ERIC is one of the world’s top 5G telecom equipment suppliers.
MSFT), it stuck to what it had always done better than most — mobile network equipment. As people adopted mobile phones, building networks for an unknown demand can be a costly business.” data-reactid=”123″>After it sold off its phones to Microsoft (NASDAQ:MSFT), it stuck to what it had always done better than most — mobile network equipment. As people adopted mobile phones, building networks for an unknown demand can be a costly business.
But now that mobility is the lifeblood of consumer and commercial communications, the massive demand means there are massive opportunities going forward. Plus, ERIC is one of the few companies in the world that is a 5G leader that isn’t a Chinese company.
And that is a very big deal in the U.S. and many nations in Europe. India is also shying away from Chinese 5G.
That’s part of the reason why ERIC stock is up nearly 37% in the past year, but still maintains great price-to-sales (1.2x) and price-to-book (3.3x) valuations, even with a high price-to-earnings ratio.
Don’t forget that Ericsson has a nearly $40 billion market cap and it has been around since 1876. It’s a global force.
Hannon Armstrong Sustainable Infrastructure Capital (HASI)
One of the biggest long-term investing trends that has begun in recent years is called Environment, Social and Governance (ESG) investing.
And while it sounds like its about butterflies and sunsets, it’s really about rethinking the way companies consider their impact on the world and the people who live in it.
Influential institutional investing houses are embracing it as are a growing list of businesses. The ESG principles are really about encouraging companies to modernize the way they do business and make their processes more efficient and transparent.
That’s much like the kinds of forward-moving, trend-setting stocks McCall reports on.
HASI is a key beneficiary of the ESG movement since it’s fundamentally a real estate investment trust that owns and invests in renewable energy and energy efficiency projects.
Furthermore, many of its projects are underwritten by federal and state governments, so its funding sources are very reliable. That’s a big deal in today’s uncertain environment.
HASI stock has a $3 billion market cap and it also delivers a 3.2% dividend, which is impressive given that HASI is up 54% in the past 12 months.
Do you remember the golden age of cassette tapes? These were the soundtracks to the lives of most people in the 1960s, ‘70s and ‘80s. For you younger readers, these were the CDs of their time.
But you really need to think of them as that generation’s data storage devices, since that’s what magnetic tape was all about, whether for businesses or consumers.
TDK was a leader. It was also a leader when tapes went out of style and CDs became the new wave of data storage. Then it sold off those assets and moved into capacitors and inductors for chips, and eventually into solid state data storage.
As you can see, while its name is a vintage brand, the company has remained at the cutting edge of technology.
Today, its power management and power supply products are the cornerstone of 5G technology. It also uses this technology for mobile phone and laptop batteries, as well as electric vehicles.
What’s more, at this point abut 90% of its business is outside Japan, so it is wired into the expanding tech markets around the globe.
TTDKY stock has a $13 billion market cap and provides a respectable 1.3% dividend. It’s up nearly 40% in the past year, but it’s still a value relative to other popular tech stocks.
Source: JHVEPhoto / Shutterstock.com
In a world where animal-human diseases are growing as nature retreats to civilization, it’s comforting to know that ZTS is around. It’s one of the leading animal healthcare companies in the world.
If you recall last year about this time, the headlines were full of China’s massive problem with the African Swine Flu (ASF) in its pig population. When all was said and done, the country had to kill more than 40% of its pigs because of the disease.
That set considerable economic turmoil, given the fact that China is the leading consumer of pork in the world. More recently, you may recall the shortages in the U.S. of beef and chicken at times during the pandemic because the processing plants were shut down. Multiply that shortage by an order of magnitude and think about lasting months rather than weeks.
The point is, whether it’s livestock, large animals or our favorite pets, animal health is a big deal. And, it’s a big business. ZTS has a nearly $76 billion market cap.
Zoetis has been serving the animal healthcare market since the 1950s, and has global reputation at this point. For example, it was already developing an ASF vaccine when the pig pandemic hit. It also provides a wide variety of medicines, diagnostics and equipment for veterinarians and other animal health markets.
ZTS stock is up 26% in the past year and has a small 0.5% dividend. All its sectors are flashing green, making it one of the standout tech stocks to buy now.
Each of these tech stocks show promise, but I want to quickly bring your attention to another growth play. It’s bound for long-term success that’s perhaps even more impressive, only the space it focuses on is mobile communication.
technological revolution that will forever change communication on a global scale.
But it’s bound to become its own king with an approach to mobile interaction that we’ve never seen before.
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