Historically, I had avoided technology stocks, but over the years began to see that technology and value can go hand in hand, if the price is right.
The letters in "BITES" each represent the first letter of the companies in the portfolio, which includes Benchmark Electronics (BHE), Ingram Micro (IM), Tech Data (TECD), Electro Scientific (ESIO) and SYNNEX (SNX).
The original intent was to identify companies that met the following rather stringent criteria and track their progress:
- Minimum market cap of $250 million
- Trading for less than 2 times net current asset value
- Profitable during trailing 12 months
- Forward price-earnings ratio is less than current PE
- Long-term debt-to-equity ratio is less than 30%
- All are technology-related companies
Benchmark Electronics has also performed well, as shares are up about 29%, while Ingram Micro is up 19%, and Tech Data is up 8.5%. Electro Scientific Industries has lagged, with shares up just 0.5%. BHE data by YCharts
Despite its strong performance, the portfolio is still not expensive, trading at 1.73 times net current asset value, 1.2 times book value per share, and 0.52 times sales. Of course, given the current government partial shutdown, price action in "BITES" members could be very volatile in the coming days. At the time of publication, the author was long Ingram Micro and Electro Scientific. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.