It's started out as a great 2012 for technology stocks. So far, the tech-heavy Nasdaq has stomped the Dow Jones Industrial Average; returning 7.7% versus the Dow's 3.6% return. However, few places have gotten as much attention as the tech hardware space.
You can thank Apple (Nasdaq: AAPL ) for that. The company's blowout earnings captured the imagination of the tech world last week; Apple posted a stunning $13.1 billion in profits last quarter.
Yet, Apple didn't make the list of top performers during the month despite adding nearly $45 billion of worth to its market cap during the month. By the way, that's the equivalent of adding the value of five Research in Motions if you're scoring at home.
That's because while Apple had one of the most impressive quarters in recent memory, it's just too big to keep up with the percentage moves of some of the smaller players in the industry that really jumped this quarter. Without further ado, here are the top 10 performing tech hardware stocks in January. Below the table I've provided more details on what's driving the performance of some of the more notable companies on the list.
% Price Change
|IPG Photonics (Nasdaq: IPGP )||56.4|
|Emulex Corporation (NYSE: ELX )||55.4|
|Newport (Nasdaq: NEWP )||35.6|
|OCZ Technology Group (Nasdaq: OCZ )||32.8|
Source: S&P Capital IQ. Includes only companies with U.S. listings and market caps greater than $300 million.
Emulex and OCZ
Both Emulex and OCZ make the list after providing investors with positive earnings surprises.
In Emulex's case, the company posted a 13% rise in sales and beat earnings estimates by $0.04 per share, extending a streak of earnings beats. Investors were likely most heartened by the company guiding above estimates. While Emulex has potential as a networking/storage play, it has spent the past couple years hovering near the price Broadcom offered for the company in a failed 2009 takeover bid. Forward optimism that the company could be turning the corner is a welcome development after a rough 2011.
Turning to OCZ, the company actually posted strong revenues and guidance when it reported earlier this month, but still fell the next day. Nonethless, OCZ continued gaining strongly throughout the month as it continued upping the pressure on more advanced solid state drive competitors like Fusion-io.
The laser plays: IPG Photonics and Newport
Finally, we come to the pair of laser players that made the list. I'd called out IPG Photonics as a top tech stock for 2012, and it didn't take the company long to deliver. Positive news out of China, which signals that Asian industrial end markets aren't as weak as feared, has helped move the entire laser market northward. That's also good news for laser peer Newport.
Revenge of the beaten-down growth stocks
However, with each of these stocks, it's important that investors realize they badly underperformed the market between August and the close of last year. When markets rally strongly after a period of rampant fear like we saw across the summer and November, it's often the most beaten-down stocks that bounce back the hardest.
That's it for our recap of the tech hardware space. However, if you're looking for a better stock idea to kick off 2012, we've uncovered one such stock with so much promise we've dubbed it "The Motley Fool's Top Stock for 2012" and created a special free report for investors to uncover this soon-to-be rock star. The report highlights a company that is revolutionizing commerce in Latin America, and you can get instant access to the name of this company. Thousands have already requested the report, which is free today, but it won't be forever, so access it now.