NEW YORK, (TheStreet) -- Looking to get some good tech stocks for a cheap price? Stick around.
The big market selloff of 2010 has been particularly rough on the tech sector where giants like Intel (INTC), IBM (IBM) and Google (GOOG) have delivered strong earnings only to be sent skidding downward in the days that followed.
Tech's big gains of 2009 are eroding as investors question the soundness of the economic recovery and the hollow promise that spending would soon resume.
"Much of the strong performance last year was built on cost cutting and strong global demand," says Bay Bridge Capital Management CEO Blake Bath, who posted a gain of 74% in his Tech Media Telecom Value Fund for 2009.But concerns are starting to creep in again about the economy. A lack of job growth is undermining the sustainability of consumer spending. And looking ahead, there are some looming issues, namely the limiting of government stimulus efforts in the U.S. and whether or not China's huge appetite for debt might one day subside. "It's natural for investors to question the trajectory of the market amid macroeconomic concerns, especially after the outperformance we had last year," says Bath. After the financial crisis of 2008, businesses, including the big tech shops, slashed jobs and cut costs to adjust for the economic collapse. As the worst of the downturn subsided, many of these companies, battened down with tightened-up expenses, enjoyed strong profit improvements even as sales remained subdued. With leaner operations, it was believed that many companies were well positioned to take off once the sales growth engine restarted.
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