Fund Finds Tech Suppliers Market Has Missed

NEW YORK (TheStreet) -- Technology investors may have endured a rocky summer, but the environment should improve come fall, especially for smartphone suppliers such asTriQuint Semiconductor(TQNT), says John Barr, portfolio manager for the Needham Aggressive Growth fund(NEAGX).

The $34 million fund, which garners a full five stars from Morningstar(MORN), has returned nearly 19% over the past year, better than two-thirds of its peers. Over the past five years, the fund has returned an average of close to 7%, better than 99% of its rivals.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

We've seen tech stocks sell off over the worry that the demand for PCs and even smartphones won't be there. What's your view?

Barr: We acknowledge there have been cutbacks in production for notebooks and for motherboards for PCs in the June and July time frame. That said, we are optimistic about smartphones for the holiday season and for the long term, as well as for semiconductors going into communication devices.

Why is TriQuint one of your favorite smartphone suppliers?

Barr: TriQuint is a company that is in all the hot devices. They are in the Apple(AAPL) iPhone and the iPad. They are also with HTC in the EVO(S). They are really the leader. It's also an inexpensive stock valued at around seven times next year's earnings ex-cash, and we think the growth is not recognized by the market.

Why specifically do you like Entropic Communications(ENTR), which makes chips for DVRs throughout the home?

Barr: Home DVR is something that has just been introduced by the cable and satellite companies. It's at the very early stages of its launch. Entropic is the company that supplies semiconductors into the multiroom DVRs for all of the cable companies that are just doing these launches. It's ubiquitous and it's also an inexpensive stock valued at around seven times earnings. We think it has many legs of growth in front of it and we are very early in this process.

Also in the semi space you are a fan of Entegris(ENTG). What is special about this company?

Barr: Entegris is a capital equipment supplier, so they sell to the semiconductor makers. They supply gas and liquid filtration devices. In the future this is something that's going to be required more and more as you move to new processes. The stock is valued at about five times next year's earnings ex-cash. We think the growth expectations are not understood by the market.

Why is Super Micro Computers(SMCI) one of your top technology picks?

Barr: Super Micro makes specialized servers and storage devices, so they are selling to the data centers and companies that use a great deal of high-end computing. It's a company that's valued around eight times earnings and growing around 20%. It's a company that has not been recognized by the market, and it has a lot of growth opportunities ahead.

-- Reported by Gregg Greenberg in New York.

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