by Tom Taulli | December 20, 2013 12:19 pm
With the Nasdaq up about 34% for the year, it should be no surprise that tech stocks have been some of the best performers. After all, investors have warmed up to taking risks, but also want to capitalize on mega-trends like cloud computing, mobile and social media.
Of course, some of the best tech stocks are well-known names like Pandora (P), Facebook (FB), Yelp (YELP) and LinkedIn (LNKD). Yet they were still not on the top of the charts.
Instead, the biggest winners in the world of tech stocks included a variety of obscure operators — and many of them have realized the gains because of restructuring efforts.
So which were the standouts for 2013? Here’s a look at four top tech stocks:
IQNT Return: 353%
Inteliquent (IQNT) is a provider of U.S. and international voice telecom services, primarily on a wholesale basis. It’s powered on an all-IP network. While this seems like cool stuff — which should make it part of the standout tech stocks — it has been a tough business.
For the past year, Inteliquent has been focused on transforming its operations. For example, it unloaded its data business for $54.5 million. There have been new programs to hold down costs across the organization. Oh, and Inteliquent has also been adding more services to its voice business, which has been getting traction.
The efforts have turned out to be spot-on. IQNT has raised guidance several times this year and expects positive revenues in 2014. As a sign of its improved financial strength, Inteliquent also announced a dividend. The current yield is 2.2%.
All in all, the combination of all these factors was powerful fuel for making IQNT stock one of the year’s hottest tech stocks.
CMGE Return: 398%
China Mobile Games and Entertainment (CMGE) came public back in September 2012 … but CMGE stock went on to be a big dud. Because of the volatility and concerns about accounting issues, Chinese tech stocks became something that investors wanted to avoid.
But going in 2013, people started to forget the issues and realized there were still huge growth opportunities. As for CMGE, it was turning into one of the top operators in mobile gaming in China, with over 450 titles.
For the most part, growth has been on fire for CMGE. In the latest quarter, revenues surged over 125% to $16 million. And there was even net income of $4.1 million, or 16 cents a share. The paying users are reached about 2.8 million.
No doubt, this is the kind of stuff that investors couldn’t ignore when looking for nice plays in the tech stocks category.
HIMX Return: 450%
Himax Technologies (HIMX) is a fabless semiconductor operator with a focus on image processing, such as for TVs, laptops, tablets and navigation systems. The technology has over 2,000 patents and the business is headquartered in Taiwan.
However, for some time, it was not enough to make HIMX much of an interesting player among tech stocks.
But this changed in a big way in 2013. You see, back in July Google (GOOG) bought a 6.3% stake in the company’s display subsidiary. The reason: the technology is a key part of Google Glass. If things go according to plan, Google has the right buy up to 14.8% of HIMX stock within the next year. Yes, such a deal was enough to make Himax stock one of the hottest tech stocks for the coming year as well.
More good news: Even with the run-up in the stock, HIMX stock has a decent dividend yield.
GSAT Return: 510%
Globalstar (GSAT) was one of the top tech stocks of the year. GSAT started over twenty years ago as a joint venture between Loral (LORL) and Qualcomm (QCOM). The focus was to launch satellites for phone communications.
However, it turned out to be hugely expensive and the market demand was muted. As a result, Globalstar filed for bankruptcy in 2002. After this, there was an extensive restructuring — but it too mostly failed, especially with the onset of the financial crisis in 2008. So GSAT had a habit of winding up as being at the bottom of the charts for tech stocks for many years!
But in 2013, the fortunes of GSAT stock improved tremendously. Part of the reason was that revenues began to grow again and costs got under control. Plus, GSAT stock also benefited from the potential value of its satellite airwaves, which may be used for mobile communications.
Basically, this means Globalstar could be buyout bait for companies like Dish Network (DISH), Comcast (CMCSA) and perhaps even Amazon.com (AMZN). Given the potential for a big premium on a deal, it was enough to spark the GSAT stock price and put it at the top of the tech stocks.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
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