Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Juniper Networks, Inc. (JNPR), Rackspace Hosting, Inc. (RAX): High-Growth-Potential Internet Companies

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some Internet-focused stocks to your portfolio, but don’t have the time or expertise to handpick a few, the First Trust Dow Jones Internet Index ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The First Trust ETF’s expense ratio — its annual fee — is 0.60%.

This ETF has performed well, handily beating the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why Internet-focused stocks?
The Internet doesn’t seem to be going away anytime soon, and plenty of companies are demonstrating that there’s good money to be made there. More than a handful of Internet-focused companies had strong performances over the past year. Akamai Technologies, Inc. (NASDAQ:AKAM) surged 49%, and still seems reasonably-to-attractively valued. The company delivers much of the Internet’s content, and stands to benefit from newly developing “couch commerce.” Some worry that strong competition might lead to it lowering its prices, but that might bring in more customers, too. Its first quarter’s results topped expectations.

Juniper Networks, Inc. (NYSE:JNPR)

Networking solutions company Juniper Networks, Inc. (NYSE:JNPR) jumped 43%, and is poised to profit along with fiber-optic companies as demand grows. It’s also been mentioned as a possible takeover target. Big telecom companies are expected to boost their capital expenditures, which would deliver dollars to Juniper Networks, Inc. (NYSE:JNPR). Some see its bigger competitor Cisco Systems, Inc. (NASDAQ:CSCO) as the better bargain, but Juniper is nimbler.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Big Data operator Tibco Software Inc. (NASDAQ:TIBX) sank 12%, while it has been adding recurring-revenue contracts. Of all things, staffing might be an issue for the company, though my colleague Anders Bylund remains a “committed owner,” seeing its competitors having trouble competing with it. The company has been restructuring, with bulls hoping for improved performance.

Rackspace Hosting, Inc. (NYSE:RAX) shed 6% over the past year, but close to 50% year to date. The cloud specialist has been facing tough competition from the likes of, Inc. (NASDAQ:AMZN), which recently lowered its prices. Rackspace Hosting, Inc. (NYSE:RAX)’s last quarter was disappointing, but its price drop has increased bulls’ interest in it, with some hopeful about its new sales chief.

The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies — and make investing in, and profiting from it, that much easier.

The article High-Growth-Potential Internet Companies originally appeared on is written by Selena Maranjian.

Longtime Fool contributor Selena Maranjianwhom you can follow on Twitter, owns shares of The Motley Fool recommends, Cisco Systems, Rackspace Hosting, and Tibco Software. The Motley Fool owns shares of

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.