The Top 10 Technology Stocks

In our Motley Fool CAPS community, more than 31,000 ranked players evaluate a galaxy of more than 4,700 stocks. Today, we're tapping that expertise to discover which tech stocks have earned the CAPS community's favor.

Surprise! Our top 10 list isn't filled with typical names like Oracle, Microsoft, or IBM. Instead, it's an eclectic group, including small caps and foreign companies. All of these stocks have earned CAPS' highest five-star rating:

Just the FactSet
FactSet Research Systems particularly caught my eye. This company aggregates more than 50 database sources for financial services, and it's picked up six proprietary databases from several acquisitions since 2001. One of its latest databases is designed for the rapidly growing private equity sector.

According to FactSet, the company's client base consists of 87 of the top 100 investment managers. It serves 1,914 clients, encompassing 33,300 users. FactSet recently posted solid third-quarter earnings, with revenue and earnings increasing 23% and 37%, respectively. Additionally, recurring subscription revenues and relatively fixed assets make the company a cash cow.

This could make FactSet a nice candidate for a going-private transaction or a merger with another data provider. Keep in mind that Reuters and Thomson are putting together a megamerger, while News Corp. makes a whopping $5 billion bid for Dow Jones.

Efficient Perficient
Looking for a small-cap tech play? Perficient provides high-end consulting and application development services for larger enterprises such as Wachovia and Anheuser-Busch. Its applications include portals, e-commerce systems, business intelligence, and mobile networks. Perficient has mostly grown by acquiring privately held information technology consulting firms; over the past three years, Perficient purchased ten IT consulting firms. Additionally, the company has been quite effective at striking partnerships, most vitally with IBM.

The IT consulting space can be volatile, since just a couple of major contracts can have a big impact on a company's finances. Despite this unsteadiness, Perficient has grown sales at an average of 37.4% per year over the past five years, and has posted profits for the past three years.

Last week saw Perficient's latest acquisition, a $14.24 million deal for Tier 1 Innovation, which focuses on Oracle products. The deal will extend Perficient into the Denver/Rock Mountain market, adding $11 million in annual revenue.

That's the cream of the CAPS crop for tech pitches. Got one of your own? Share it with your fellow Fools by joining Motley Fool CAPS today.

Further Foolishness:

• 3 More Kings of Cash
• FactSet Research Does It Again
• Perficient Swings for the Fences

Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 3,171 out of more than 50,000 participants in CAPS.