NEW YORK (TheStreet) -- The selloff in new tech momentum stocks such as Netflix (NFLX)Facebook (FB) and Twitter (TWTR) presents a buying opportunity for savvy investors, said fund managers who are predicting a rebound in their prices.
Yet others warned against catching a falling knife, as a lack of market momentum this year sees investors shun growth stocks in favor of their cheaper value peers.
The market is drawing sharp differentiation between old and new tech stocks, with Microsoft (MFST), Cisco (CSCO) and IBM (IBM) -- companies with solid balance sheets and well-established business models -- all higher for the year to date. Several analysts have re-labeled them value stocks, despite technology traditionally being viewed as a growth sector.
By contrast, Twitter, Facebook and Netflix are seen as trendy new-tech stocks, where traditional financial ratios mean less, as valuations are predicated on forecasting future social trends. These companies rallied hard -- especially in the second half of last year -- amid a backdrop in which momentum and optimism drove prices higher.
But as the rally enters its sixth year and concerns rise around correction risks, investors have re-orientated away from trendy names.
Warren Financial Service Chief Investment Officer Randy Warren views the selloff in new-tech stocks as a buying opportunity for investors who were unable to buy-in during their IPOs.
"You have to know what you're buying, as people who have too much in these stocks are hitting the panic button. But if potential investors sit on their hands, these stocks could come roaring back," he said in a phone interview.