Eleven Picks for Wi-Fi Greatness

Rob Duff, a reader who works for Wachovia Securities, said he believes wi-fi will become pervasive in time and offered a trickle-down methodology for building an investment in the area. He starts with broadband pipe providers who must be paid a fee for access to their Internet backbones, such as Comcast(CMCSK Quote), Verizon Communications(VZ Quote), AT&T(T Quote) and Level 3 Communications(LVLT Quote).

Next, he lists integrated semiconductor and software package providers Intel(INTC Quote), Microsoft(MSFT Quote) and Intersil. Then he adds makers of the new toys, which would be Flextronics (FLEX Quote) and even Dell Computer(DELL Quote).

Duff recommends that anyone wishing to take advantage of this "mega trend in the making" insist on a considerable margin of safety while investing here. This means buying a diversified basket of names, and buying each of them cheaply. Of this bunch, I will add Intel, Verizon and Level 3 to my watch list.

Reader Steve Goldstone calls our attention to Boingo Wireless, the first company to try to string together a nationwide network of wi-fi hotspots. It was started by EarthLink(ELNK Quote) founder and Chairman Sky Dayton, and is funded by both EarthLink and the venture capital arms of several other entities, including Sprint PCS Group(PCS Quote) and Evercore.

I can't imagine how Boingo will survive, but in all honesty, I never thought EarthLink -- my first Internet service provider back in 1996 -- would last either, and it has outpaced most of its competitors both as a company and as a stock.

And finally, before disconnecting, I'd like to offer a tip of the cap to old-line industrial electronics-systems maker Harris (HRS Quote), which is one of the granddaddies of wi-fi. A powerful developer of patented technology, it spun off Intersil a couple of years ago and is still a major player in the development of wireless and satellite solutions for the Pentagon, the oil industry and broadcasters.

Harris is trading near its five-year low in its price-to-earnings multiple, carries a price-to-book value of a low 1.5 and a price-to-sales value of less than 1. It also offers the prospect of double-digit growth and a 1.5% dividend yield. I'll add it to my wi-fi watch list as the final pick for more conservative investors, which by now should mean just about everyone.