Selloffs happen. It’s simply a reality.
The much-repeated lesson of Newtonian physics — that what goes up must come down — always seems to be put on the back burner until “down” starts to happen again.
Furthermore, all the talk in the news regarding the amount the Dow Jones Industrial Average and other indices have dropped is silly. It’s not about the point drop, it’s about the percentage drop. Consider that if the Dow loses 1,000 points when the market is around 25,000, it’s about 4%. It only dropped about 500 points back in 1987 — but the Dow was only trading around 2,000, so it was a 22% one-day drop.
What’s really happening is that the markets have grown for so long and so steadily that the selloff is simply jarring. And while the percentages are modest, the numbers seem bigger than they are.
But it’s no time to panic. It may be time to readjust your portfolio mix, but it’s not time to head for the hills.
To help you prepare your portfolio and perhaps get a bit more peace of mind, here are 10 tech stocks that will defend against the bears and still give you the upside you have come to expect.
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AthenaHealth
Athenahealth Inc (NASDAQ: ATHN) is major player in electronic health records, or EHR.
This was a huge space when the Obama administration started to redesign the healthcare system, and remains a big opportunity even under a new administration. One of the biggest challenges to the old system was that all medical records were kept as paper files. There was no system or standard for storing medical records digitally.
So, laws were passed to force medical practitioners as well as healthcare facilities to transition to medical records, or as it became known in the industry EHR. That was around 2013 and EHR stocks were on a roll in 2014.
Admittedly, sexier trends started to pop up last year and many investors forgot about this niche. But there’s still plenty of upside left here, with little risk that a player this size will fade away.
Weibo Corp (ADR) (NASDAQ: WB) is often referred to as the Twitter Inc (NASDAQ: TWTR) of China. But more realistically, it’s closer to the Facebook Inc (NASDAQ: FB) of China.
And it’s not just because of its powerful stock performance. In the past five years, WB stock rose about 450% — and in the past year, it’s up more than 130%. To put that in some perspective, FB is up 190% and 30%, respectively.
The reason is because WB has powerful Chinese internet companies that have controlling interests in the company, like SINA Corp. (NASDAQ:SINA) and Alibaba (NYSE:BABA). They have created a virtuous circle whereby WB’s growth is good for everyone. And on top of that the Chinese language market is huge throughout Asia, not merely in China.
Also, its growth has little to do with any U.S. economic or market issues. That’s a big reason to look to this stock as a place to hide from America’s recent stock market volatility.
Qualys
Qualys Inc (NASDAQ: QLYS) has two key buzzwords working for it — Cybersecurity and the cloud. It specializes in cloud-based cybersecurity and compliance systems.
Again, both the cloud and cybersecurity have had their day and saw big buying pressure. But the stocks were heavily bought, almost indiscriminately, and many fashionable names fell by the wayside in 2017 as driverless cars or artificial intelligence captivated tech investors.
As a result, the last big pop for QLYS stock was back in 2015. But over the past five years, Qualys Inc. stock is up 360% to show amazing long-term performance. And lately, there have been signs of life with a run of 55% or so in the last 12 months.
Cybersecurity is still a strong space with big growth trends behind it, and QLYS is a major player worth watching.
Match
Match Group Inc (NASDAQ: MTCH) is the online dating service company for which it is named. It also owns Tinder, PlentyOfFish, Meetic, OkCupid, Pairs, Twoo, OurTime, BlackPeopleMeet and LoveScout24.
What’s more, MTCH stock has a $9 billion market cap. It’s a real player in the industry and has built a significant moat around its business model. Its apps are available in 42 languages in 190 countries.
If the digital age has meant one thing, it has meant a whole new layer to dating. That means from discovery to communicating to nurturing relationships. And given challenging odds of dating, a dating stock is like a gambling stock in the digital age.
If that analogy works for you, then MTCH is like owning a quality casino stock. And Millennials as well as Gen Zs are particular and patient, which means they are happy to roll the dice longer than earlier generations. That’s why MTCH stock continues its rise. It was up 92% in the past 12 months and no economic cycle will ever dampen our desire for connection.
MSCI
MSCI Inc (NASDAQ: MSCI) may seem like a familiar acronym. And it should. If you are a global investor that uses exchange traded funds (ETFs) or any other type of mutual fund, you are likely familiar with one MSCI global index or another.
That’s what MSCI does. For the past 40 years it has built global indices to measure markets, sectors and performance that are used as performance benchmarks for most global mutual funds and ETFs, as well as publicly and privately managed accounts.
It has a portfolio of analysis products and will also custom build tools for clients. Given its name and reputation in the space, as well as the growing demand for a global perspective on investment and performance, MSCI has a clear path ahead.
Etsy
Etsy Inc (NASDAQ: ETSY) is the hipster online sister to the corporate Amazon.com (NASDAQ:AMZN) experience.
It is built to allow mom and pop operations sell their wares through a powerful global online channel. Looking for alpaca dryer balls? A hand knit sweater or some unique jewelry? You may not be, but lots of other people are. And ETSY has built itself into a one-stop shop for quirky items like these.
The challenges of maintaining that high-touch feeling while also operating as a publicly traded company hasn’t come easy. There’s a tough balancing act when altruistic goals meet Wall Street finance. ETSY stock IPO’d in early 2015 and it has yet to reach its IPO price again. And much of the reason was precisely because Wall St’s expectations weren’t met with the expected enthusiasm from Etsy’s leadership.
But in the past couple years that has finally been worked out. And in the past 12 months, ETSY stock has hit its stride and is up 45% and rising.
TriNet
TriNet Group (NYSE: TNET) may not be in an incredibly interesting sector, but it is in a very solid growth niche that has plenty of long-term promise.
TNET is a human resources firm that specializes in small- to medium-sized businesses. These are the businesses that make up a huge amount of the companies that make up the U.S. economy. That means TNET’s potential client group is vast.
This is one sector where technology has built in a win-win for TNET and its clients. For example, if you run a small construction company, you may be very good at building a housing development and passing inspections. But that doesn’t mean you can easily process payroll, manage employee benefits or even know how to hire skilled people that can do that for you.
But that is precisely what TNET does. And with TNET stock up 63% in the past 12 months, that success continues to grow.
Alarm.com
Alarm.com Hldg Inc (NASDAQ: ALRM) is all about the smart home and smart business movement, with a special concentration on security.
This has become as very dynamic space as wireless networks now allow many different devices to communicate with one another and then communicate with the network administrator as well as the owner.
What’s more, all this technology has allowed security systems to become easier to set up and offer much more than simple break in alarms. With cameras, sensors and now voice commands, you can control a huge amount of home and business operations remotely or simply by asking. Having built a solid footing in the space, ALRM is getting a national reputation that makes it a great growth candidate with buyout potential.
TransUnion
TransUnion (NYSE: TRU) is one of the top credit agencies in the U.S. It provides financial information, including consumer reports, risk scores and other similar analytical services to both businesses and consumers.
Since the financial meltdown in 2008, credit scores have become the gold standard for financial institutions in judging the creditworthiness of consumers. And at this point, credit scores and risk factors are a powerful force in the marketplace, especially when it comes to a generation of college students with massive student loan debt that are trying to enter the consumer economy.
That’s why TRU not only provides information and services to lenders but also provides credit support services to consumers as well. It’s up 67% in the past 12 months and will continue to grow with the economy.
Insperity
Insperity Inc (NYSE: NSP) is a human resources firm that contracts with enterprise level clients to run HR and business operations like retirement and insurance services as well as the hiring, performance management and time and attendance aspects of HR.
HR has been a dynamic sector since the market meltdown a decade ago. First, HR professionals were brought in to help restructure the workforce in many companies that were looking to find efficiencies and reevaluate staffing and benefits.
Then, as things stabilized the HR departments themselves were outsourced to specialty companies that could do all the HR functions remotely or through cloud-based technologies.
INSP has been around for nearly 15 years, so it’s not a johnny come lately to the space and it’s this longevity that gives it it’s competitive advantage. Up 57% in the past 12 months and averaging about 60% annually for the past 5 years, INSP stock is on a long-term roll.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
