The information technology sector is the S&P 500’s most profitable sector, according to Bloomberg, and the profit margins for most infotech companies have been steadily increasing. Yet investors seem to be relatively uninterested in the large-cap, established tech giants at the moment. But small-cap tech stocks are a different story. Some people believe that irrational exuberance has returned to the tech sector, but I think there are still gains to be made, so I’ve selected a group of eight penny stocks that could deliver big gains.
A quick note: The names on our penny stocks list might not be what you would consider “true penny stocks.” But micro-cap pink sheet or OTC stocks that cost only a few cents per share are too risky. Our stocks are a little bigger and, therefore, a little safer, but still have the ability to deliver spectacular gains.
Here are our top infotech penny stocks to buy now:
Westell Technologies (WSTL)
Westell Technologies (NASDAQ: WSTL), through its subsidiaries, designs, distributes, markets, and services a range of broadband, digital transmission, remote monitoring, power distribution, and demarcation products used by telephone companies and other telecommunications service providers. The penny stock is relatively flat for the year, but is up a huge 133% in the last 12 months. And with strong earnings growth of 1,875%, investors may want to consider buying here.
Global commercial wireless messaging system operator ORBCOMM (NASDAQ: ORBC) is up 46% in the last 52 weeks and 17% since the start of 2011. In its last income statement, this penny stock posted year-over-year quarterly revenue growth of 6%.
Powerwave Technologies (PWAV)
Powerwave Technologies’ (NASDAQ: PWAV) indoor/outdoor wireless coverage systems offer better signal quality and reduced network congestion, giving users faster access and longer battery life, and support mission critical communications for government, law enforcement and public safety agencies worldwide. The penny stock has gained 42% since the start of the year, and 122% in the last 12 months.
Dot Hill Systems (HILL)
Since the beginning of January, storage system and enterprise server software provider Dot Hill Systems (NASDAQ: HILL) is up 59%, compared to a gain of 6% by the Dow Jones Industrial Average. Since last May, the penny stock has jumped an impressive 116%.
RAE Systems (RAE)
RAE Systems (AMEX: RAE) develops and manufactures multi-sensor chemical and radiation detection monitors and networks. Investors have watched this penny stock climb 197% in the last year and 40% year-to-date. Private equity firm Venture Capital just boosted its acquisition offer for the company to $2.25 per share.
Zix Corp. (ZIXI)
Zix Corp. (NASDAQ: ZIXI), which provides Internet security applications, has gained 53% since this time last year. In its last income statement, this penny stock posted quarterly earnings growth of 237%, year-over-year, and a net profit margin of 123%.
Majesco Entertainment (COOL)
Video game software and digital entertainment products company Majesco Entertainment (NASDAQ: COOL) is up a remarkable 273% since the beginning of 2011. In its last income statement, COOL reported quarterly earnings growth of 78% and quarterly revenue growth of 66%, year-over-year.
Glu Mobile (GLUU)
Glu Mobile (NASDAQ: GLUU) designs, markets and sells mobile games worldwide. The penny stock is up 151% year-to-date and 275% in the last 12 months. The stock made a new 52-week high of $5.26 yesterday.