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BOSTON (TheStreet) -- High-flying technology stocks such as Priceline.comundefined and OpenTable (OPEN) - Get Free Report are dismissed by many analysts as expensive and overhyped.

Ian Warmerdam, manager of the

Henderson Global Technology Fund


, says they're attractive investments because industries like e-commerce, data storage and network equipment are thriving in an economy that's barely growing.

Warmerdam says companies' large capital budgets are supporting spending on technology even as Americans, whose purchases of consumer goods make up the bulk of the economy, get tight-fisted.

Henderson Global Investors has about $120 billion in assets and 17 offices worldwide. Based in Edinburgh, Scotland, Warmerdam manages the successful $305 million Henderson Global Technology Fund.

The tech-centric fund, started a decade ago less than two weeks before the 9/11 terrorist attacks, has thrived amid the tech bubble's unwinding, two severe recessions and major new trends in technology. It's the only tech fund to have outperformed both the

MSCI All-Country World IT Index

and the


specialty-technology category every calendar year since inception, with an average excess return of 6.1% over its benchmark.

Not every investor is as excited about the tech sector as Warmerdam is. Technology was the best-performing sector of the

S&P 500

last week as the broad market index pieced together a five-day winning streak. For the year, though, information-technology stocks are down 1%, trailing defensive sectors like utilities (up 7% in 2011) and consumer staples (up 4.7%).

Warmerdam says sentiment toward the technology sector continues to be hurt by the wealth that was lost in the Internet bubble in 2000.

"Frankly, the sector is completely different now, particularly in terms of valuation," Warmerdam says, noting that price-to-earnings ratios have fallen from an average of 50 times forward earnings in 2000 to the current market average of 11 or 12 times, in line with the broader market. "There are much more attractive valuations on an absolute basis."

The fact that the broad tech sector now trading in line with the market indicates an attractive opportunity, Warmerdam says, even with macro headlines like European debt concerns and weakening economic data spooking investors.

In addition, the 2008 stock-market crash showed that tech stocks are resilient.

"There is a lot more recurring revenue from companies, and tech companies are managed much more conservatively than in the past," he says. "What speaks to the conservatism is that tech is the only sector of the S&P 500 with positive net cash on the balance sheets."

Warmerdam offers

four stocks

in his fund's portfolio that some investors may be wrongly dismissing.


details those picks on the following pages.


Company Profile

: is a travel reservation Web site, offering users the ability to book hotels, flights, rental cars and cruises at a discount.

Share Price

: $531.27

Warmerdam's Take

: Priceline has been a very successful investment for the Henderson Global Technology Fund, up 33% this year and more than 50% over the past 12 months.

While U.S. investors likely connect the company to spokesman William Shatner's commercials, Warmerdam says what tends to be forgotten is how much growth Priceline has in Europe.

"A vast majority of their growth and profits come from a European Web site called, not from," Warmerdam says. "The vast majority of their growth over recent years has been driven by this business in Europe, which has been in a much stronger position. It has been exceedingly successful and we think it will continue to be so."

Warmerdam says that the European hotel market is much more fragmented than the U.S. market, which is dominated by major hotel chains like




. While 45% to 50% of hotel reservations in the U.S. are made online, that number is only 15% in Europe.

"With Priceline having a very dominant position in Europe, it would imply a much larger market opportunity for them in the future," Warmerdam says. "In Europe, 70% of the market is independent, mom-and-pop hotels. These hotels need an intermediary, as they have no way of reaching the Internet consumer directly. Having a big lead in Europe means Priceline has the benefits of scale and they have lower costs than competition per hotel room that they book."

Beyond the secular trend and opportunity in Europe, Warmerdam notes that Priceline grew revenue almost 80% year-over-year in the last quarter. In addition, he says the stock has a very attractive price-to-earnings ratio at 18 times forward earnings.

"This is really a case of secular growth of the transition online outweighing the cyclical effect of a weakened travel market," he says. "We think is very attractive given the potential for high growth going forward."


(AAPL) - Get Free Report

Company Profile

: Apple, the largest company in the world by market cap, is the maker of personal electronic devices like the iPhone, iPod and iPad. The company also designs and manufactures desktop and laptop computers and software.

Share Price

: $412.14

Warmerdam's Take

: Warmerdam bought Apple shares for the Henderson Global Technology Fund about nine years ago, prior to the launch of the iPod music player when shares were below $10.

"It's been one of our best success stories, but to this day we remain very enthusiastic," Warmerdam says. Apple shares are up more than 5,000% in the past decade. "We could see fairly early this should be a success. And after all these years, on a price-to-earnings basis, it's probably as cheap now as it was then."

Warmerdam understands the perception that, as the stock has run so far and it's the largest company in the world, it's expensive. He argues instead that Apple shares are cheap at 11 times forward earnings, which is actually a slight discount to the

S&P 500


"If you give some value for their enormous cash balance they're hoarding on their balance sheet, Apple trades at about 8.5 times forward earnings," he says. "So it's trading at a discount to technology and a discount to the broader market."

Despite being a holding in the fund for nearly a decade, Apple is the type of technology subsector that Warmerdam would usually avoid.

"We tend to shy away from consumer electronics company because of the fashion and hip-driven nature," he says. "We're looking for companies with longer-term barriers to entry. Apple is unusual in this case. Through the iTunes and App Store, they've created an ecosystem around their products, which creates stickiness."

This, Warmerdamn says, creates a far greater predictability when investors think about long-term valuation. "Once you use an Apple product, you're more likely to stick around and buy more Apple products," he adds.

Open Table

(OPEN) - Get Free Report

Company Profile

: OpenTable is a real-time online reservation network for restaurants.

Share Price

: $48.18

Warmerdam's Take

: After the company's initial public offering in 2009, OpenTable shares traded around $30 for nearly a year until taking off like a rocket in the second half of 2010. The stock hit a record $118.66 in April but the shares have lost more than half their value after CEO Jeffrey Jordan resigned at the beginning of May.

"It's a controversial stock at the moment," Warmerdam says. "OpenTable has been performing poorly over the last few months. It's a stock the market doesn't want to like.

However, Warmerdam says he finds the secular opportunity for Open Table extremely attractive. "Their business model is such that they actually go into the restaurant and provide a table reservation system essentially at cost," he says. "That's good value for the restaurants."

But like Apple and the iTunes ecosystem, OpenTable's platform also creates stickiness among restaurant customers, Warmerdam says. He's also keen on the idea of OpenTable blazing a trail across the U.S. between San Francisco and New York, two of the company's largest markets.

"In some areas, like San Francisco and New York, the penetration has become exceptionally high," Warmerdam says. "Over 63% of restaurants in the Bay Area have Open Table and are taking almost 40% of reservations via Open Table. It's a quite exceptional growth opportunity if it spreads across the U.S."

The problem is competition eating away at OpenTable's market share is a worry for investors. Recently,


(GOOG) - Get Free Report

bought restaurant review company


, sparking speculation the mammoth Internet search giant would expand into restaurant reservations and reviews.

"There has been bad news with Google trying to get into the space, and other companies wanting to compete," Warmerdam says. "But I think Open Table is far enough ahead that it will be extremely difficult for new competition to really eat into their market share, particularly in the U.S."


(BIDU) - Get Free Report

Company Profile

: Baidu is the top Chinese-language search provider, often referred to as the Google of China.

Share Price

: $138.33

Warmerdam's Take

: There's no doubting Baidu's hold on China, as the company has a market share of almost 80% in the rapidly growing country, a total that dwarves even the market share Google enjoys in the U.S.

"They're dominant," Warmerdam says. "They've fended off competition. The culture and business differences really allow local players to do well in the Chinese market. Internet has proven no different."

Warmerdam notes that Chinese markets are in a much earlier stage of growth, and that the percentage of GDP spent on advertising in the country should increase enormously as the economy continues to grow.

"It would speak to a many-fold increase in Baidu's addressable market opportunity," Warmerdam says. "This company is growing exceptionally fast. Last quarter, they saw 90% revenue growth and 100% earnings growth."

Warmerdam notes that Baidu American Depositary Receipts (ADRs) don't appear cheap at 33 times 2012 earnings, but looking out a year further, the stock trades at a more palatable 22 times earnings.

"In context of the huge market opportunity and growth opportunities, we're very enthusiastic about it," Warmerdam says.

>>To see these stocks in action, visit the

4 Resilient Tech Stocks for a Tough Economy

portfolio on Stockpickr.

-- Written by Robert Holmes in Boston


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