BOSTON (TheStreet) -- The turning of the calendar to a new year usually means making resolutions, whether it be to exercise more or to quit smoking. Investors, though, should resolve to avoid boring technology stocks in 2012, says fund manager Jerry Jordan.
Jordan, manager of the Jordan Opportunity Fund (JORDX), sees little opportunity in the technology sector, which outperformed industrials, financials and materials in 2011 but underperformed consumer staples, utilities and health care. With 2012 barely begun, Jordan says investors probably won't find many appealing names in tech this year, either.
"There is very little in tech worth owning," Jordan says by phone from his Boston office. "It's not so much avoid tech. It's just that there isn't much exciting. It's just hard to find anything that's particularly interesting."Over the past year, the information-technology sector of the S&P 500 has gone nowhere as several tech heavyweights have floundered. Hewlett-Packard (HPQ) is down 37% over the past year, Oracle (ORCL) has dropped 17%, and Microsoft (MSFT) has declined 4%. High fliers like Akamai Technologies (AKAM) and Salesforce.com (CRM) have lost 31% and 25%, respectively, over the past 12 months. Jordan has a takedown for nearly every group of tech companies. Of hot up-and-coming stocks like Salesforce.com and VMWare (VMW), Jordan notes that the stocks trade between 50 and 80 times earnings, a rich premium to the broader market. While he says HP and IBM (IBM) are "crazy cheap" by the same valuation metric, he notes that investors will probably see flat or lower earnings going forward. "For example, Microsoft (MSFT) is a fine stock to own, and it won't hurt you, but it's been a market performer for years," Jordan says. "And IBM, it's a Dow stock, it's been around forever, and Buffett owns it. But what does it do? It's a big lumbering tech company with a lot of entrenched customers. They don't do anything really well or anything really wrong. I don't know if that continues."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV