Like no other industry, the tech sector fuels our dreams. Investors' imaginations (and greed) are fueled with thoughts of grabbing shares in the next big thing. Dreams are often dashed, but tech never lacks new possibilities.
To flesh out some of those possibilities, I asked some of my fellow analysts what their current tech dream stocks are. Read on!
Rick Munarriz, Fool contributor and Motley Fool Rule Breakers analyst
I'm a fan of unlikely tech stocks that are innovating atrocious industries. After all, it's the most damaged of sectors that are begging for disruption.
This brings me to OpenTable (Nasdaq: OPEN). Everyone has heard the restaurateur horror stories. Too many indie eateries fail, and here is OpenTable with its electronic reservations book that presumably makes it more expensive to run a haute cuisine hotspot. Well, the math behind the madness is that OpenTable works. It seats incremental diners at attractive costs for an industry where table turns are everything.
Its high-tech platform lets restaurant owners know their clientele a little better, and the website and smartphone apps make it easy for diners to make reservations at promising establishments.
The proof is in the numbers. Revenue rose 33% in OpenTable's latest quarter, with earnings before stock-based compensation items more than tripling.
Matt Koppenheffer, Fool contributor
There's no need to go to bed and wait for visions of a great tech stock to join the sugar-plums dancing in your head -- Intel (Nasdaq: INTC) is very real and prime for the picking.
The great thing about Intel is that you don't need to cook up a complex investment thesis to see why the stock is so attractive right now. The company is the leader in its industry and continues to trounce archrival AMD (NYSE: AMD). It's also continuing to innovate and will be turning up the heat on NVIDIA and Qualcomm with the new Moorestown mobile CPU. Intel claims that Moorestown will offer true multi-tasking, the ability to watch 1080p video, and even play games like World of Warcraft.
Financially you couldn't ask too much more of the company. It has a rock-solid balance sheet with $16 billion in cash against just $2.5 billion in debt. And healthy cash flow from operations with relatively low capital spending means that the company continues to earn plenty of cash.
And right now you get all of this at a forward price-to-earnings of 11, with a 2.9% dividend to boot.
Alex Dumortier, CFA, Fool contributor
My tech dream stock only began trading on the public markets last week in an anticipated debut. However, many technology stock investors may have overlooked it because it's formally classified in the financials sector, not technology. It's CBOE Holdings (Nasdaq: CBOE), the parent company of the Chicago Board Options Exchange, the largest options exchange in the U.S. I'd argue that CBOE has more in common with business-to-business software provider Ariba than it does with Wells Fargo, for example.
The numbers for CBOE as with its larger Chicago sibling, CME Group (Nasdaq: CME) are absolutely eye-popping: How about a return on equity of 37% (2009), achieved without a single dollar of debt on the balance sheet!
Unfortunately, at 27.5 times trailing earnings, the valuation should raise some eyebrows, too; there's no need to rush into this stock half-cocked. Still, growth prospects are attractive and, at just over $3 billion in market value, it looks to me like an ideal acquisition target for CME Group or IntercontinentalExchange (NYSE: ICE).
Tim Beyers, Fool contributor and Rule Breakers analyst
From prior roundtables, Fools already know where I stand with the biggies in tech. I like Google more than Apple, yet own shares of both. Among less-discussed techies, I really like Taiwan Semiconductor Manufacturing (NYSE: TSM), a stock I've held since 2006.
New investors stand to profit as much as I have in the past four years. Why? Devices. A proliferation of new smartphones, PCs, tablets, and related gear means greater demand for semiconductors, and Taiwan Semi manufactures more of them than anyone else in the world.
Management also has a history of returning capital to shareholders. Through the end of last year, Taiwan Semi's dividend was up almost 9% a year since 2004. And with its headquarters located in Taiwan, this business could profit handsomely if China continues its tech renaissance. On balance, this is the lowest-risk tech grower I own.
Those are some stocks we dream about. Share some of yours in the comments section below. Or check out our thoughts on whether Microsoft should go nuclear.
