5 Tech Sector Bargains to Buy in 2013

Like the other names on this list, Intel boasts a fortress balance sheet, with more than $10 billion in net cash and investments. The firm has been using all of that cash to reward shareholders, maintaining what's now a hefty 4.21% dividend yield. The combination of a P/E ratio under 10, a near monopoly share of its market, and a huge cash dividend should be a signal that it makes sense to own Intel here.

Seagate Technology

Seagate Technology (STX), on the other hand, has had a pretty phenomenal year. Shares of the hard drive firm have doubled in the last 12 months, outperforming nearly any other large-cap name over the same time period. But despite that huge rally, fundamentals have grown even faster for STX, and shares of the $11 billion firm still trade at a substantial discount to the rest of the tech sector.

Seagate is the biggest manufacturer of enterprise hard drives, the storage medium that powers the world's servers and IT departments. With the popularity of cloud computing, that server storage has become extremely in-demand, and tailwinds are likely to persist for the foreseeable future as storage needs outpace capacity. Because most of Seagate's sales come from equipment manufacturers rather than end-users, the firm should continue to benefit as storage needs grow, even if the equipment manufacturers themselves struggle to find margins.

While the solid-state drives used in mobile devices do pose some threat to Seagate, we're a long way away from seeing SSDs in standard use on the enterprise side of the market. For that reason, Seagate's dominant position in the enterprise storage market should continue to come with hefty double-digit margins.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

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