Fusion-IO, Inc. (FIO), InvenSense Inc (INVN) & Millennial Media, Inc. (MM): Three Tech Stocks to Buy on the Taper Tantrum

Page 1 of 2

As the Federal Reserve hints at tapering the bond buying program over the next year, cyclical stocks including technology should become interesting buys. Tech stocks have underperformed the market rally over the last year as investors have piled into high yielding stocks as bond yields hit extremely low levels. Now that money should flood out of those stocks and bonds into growth stocks.

Fusion-IO, Inc. (NYSE:FIO)

The main reason the Fed would stop bond buying would be a generally stronger economy, a situation that should benefit growth stocks. The group that should outperform in this rotation of money into growth stocks includes Fusion-IO, Inc. (NYSE:FIO), InvenSense Inc (NYSE:INVN), and Millennial Media, Inc. (NYSE:MM) . These beaten down stocks not only offer the ability to rebound off weak trading, but the businesses could improve as economies around the world rebound.

As the chart below shows, these stocks have dramatically under performed the market since April 1, 2011 when Millennial Media, Inc. (NYSE:MM) came public:

FIO data by YCharts

The group includes a selection of tech stocks from flash storage to motion tracking technology to mobile advertising. The diverse selection should provide an option for any investor.

Flash Storage Leader

While Fusion-IO, Inc. (NYSE:FIO) is seen as a clear technology leader in the sector, the company continues to run into pressures from being focused on two prime customers no longer growing at extreme rates. Both Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) helped build the company up with vast orders of the advanced storage technology, yet now as those companies have matured the orders have stalled.

The company recently lost the CEO and CMO sending the stock to all-time, post-IPO lows. At only $13, the stock is only a shadow of the company when it hit maximum potential with the stock trading over $40 at the end of 2011. At the time, the market cap was soaring towards $4 billion. The biggest issue is that margins and profits have never been maxed out as the company focused on growth. Revenue is expected to surge 30% next year to $570 million making the stock at a market cap of $1.3 billion more appealing. The question is whether the new management team can turn the stock into a major winner by generating profits.

Motion Tracking

InvenSense Inc (NYSE:INVN) has recently seen its fortunes turnaround as several analysts predict that the company has finally landed Apple Inc. (NASDAQ:AAPL) as a customer. The company makes products used primarily in smartphones, tablets, and videogames to sense and track motions.

So while the stock has jumped recently from $9 to over $14, it still offers plenty of value considering the post-IPO surge to over $22 back at the start of 2012. Though InvenSense Inc (NYSE:INVN) has tons of growth potential, the stock only trades at 17 times forward earnings prior to even including Apple Inc. (NASDAQ:AAPL) as a major customer. Noteworthy is that Samsung has been a 30% customer recently providing an example of the potential impact of Apple. Revenue as well is seen growing at a 20% plus pace even before adding Apple Inc. (NASDAQ:AAPL).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!