This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stock Picker's Market for Small Caps

NEW YORK ( TheStreet) -- It's a stock-picker's market for small-cap technology shares, says Chris Retzler, manager of the Needham Small Cap Growth Fund (NESGX).

The best selections, Retzler says, include STEC (STEC) in the solid-state disc-drive industry and Entropic Communications (ENTR) in home networking.

The $55 million mutual fund has risen 45% over the past year, better than 99% its peers. During the past five years, the fund has returned over 8% annually, beating 96% of 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.

Why are small caps the place to be right now?

Retzler: We are finding a lot of opportunity in individual names. It's a stock picker's market. There are a lot of themes out there that we can invest in, such as storage, because data is continuing to grow. We like backhaul-type investments that need to optimize their systems and a lot of those are specific products and those reside in small companies.

There has been a big push toward solid-state disc drives. Is STEC the best way to play this trend?

Retzler: The solid-state disc-drive market is just now coming to a new inflection point. A lot of OEMs are out there testing the drives. We expect a great adoption rate over the next few years. They do provide energy efficiency and when put into a tiered structure of storage, they can provide an optimized system with some very expensive equipment but optimizing it from a value perspective.

One long-haul optical company you like is Infinera (INFN - Get Report).

Retzler: We do like to see the optimization of the optical network as data continues to grow, and videos and photos are uploaded on to the Internet. There is congestion in the back-haul of the systems and Infinera helps to optimize that for carriers and deliver high-quality performance to customers.

One company you like is Entropic, which makes multi-room DVR technology. Tell me about this investment.

Retzler: We like the whole home-networking opportunity that is coming. And one standard that a lot of the cable operators and satellite companies have embraced is Mocha. And Mocha chips are made by Entropic Communications. They are the leader. We are in the early innings of a great cycle for home networking, and the Entropic chips will be into a lot of products in your home.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
STEC $0.00 0.00%
ATHN $121.35 0.40%
ENTR $3.02 -2.27%
INFN $19.68 -0.05%
AAPL $132.54 0.88%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs