Markets

10 Top Tech Stocks for 2011 From Firsthand's Landis (Part 1)

By Conrad Aenlle

Updated on: January 6, 2011 / 2:48 PM EST / MoneyWatch

Kevin Landis has achieved success running technology funds by filling his portfolios with a mix of obscure names and the usual suspects. With a few days left in 2010, his Firsthand Technology Opportunities Fund (TEFQX) was up about 30 percent on the year, compared to 21 percent for the average tech fund in Morningstar Inc.'s database, making it a very strong fund in a strong sector.

Here are Landis's 10 against the field for 2011,* starting with five of his favorite usual suspects. Five of his more offbeat choices will be posted next Tuesday.

Apple (AAPL). Landis said he felt "embarrassed even saying it" and called Apple "the least insightful [pick] and yet I can't leave it off the list." He pointed out that for all of the attention focused on the company, Apple still has fairly small market shares in cell phones and personal computers and therefore has plenty of room to grow. "Because Apple's designs are so good, they can charge a premium for their products, so one point of market share is worth more for them than for one of their competitors," he added. It's hard to argue with his logic, although some have tried.

Corning (GLW). "The stock hasn't done much over the last five years, but it has exposure to some great markets," Landis said. One of them is glass for touch screens on smartphones and other portable devices. Corning's product in this niche, Gorilla Glass, is "really light and tough," he said. The so-so performance of the stock suggests to him that Wall Street doesn't fully appreciate that "human behavior has been changed" by touch-screen technology. Corning trades at 10 times analysts' consensus estimate of 2011 earnings, he noted, making the stock "very reasonably priced."

Qualcomm (QCOM). Mobile telecommunications is also a big part of the story for this semiconductor maker. "It's hard to come up with a chip company better positioned for the cell phone market, particularly the upgrade to smarter phones," Landis said. Alluding to the ubiquity of its products in that industry, he remarked, "It's almost like they're the Intel of handsets."

MEMC Electronic Materials (WFR). This company - probably the most unusual of his usual suspects - is a large producer of silicon wafers and "a great play on solar," Landis said. He noted that the solar panel industry became a bigger user of wafers a few years ago than makers of computers and other pieces of information technology and "never looked back." As the solar industry continues to expand, it means "more and more revenue for WFR," he said.

Symantec (SYMC). Landis's choice of the Internet security company "kind of goes with the basic thesis that the classic PC is going to be less and less the center of your world as more phones are used to connect to the Cloud," he said. The migration means that security threats "change from getting a virus on your computer to [problems affecting] all these services like Facebook and Twitter secured over the network." Now that McAfee has been acquired by Intel (INTC), Symantec "is the only freestanding, independent security company out there" handling the adjustment, he said.

*MoneyWatch believes that index funds, with their low expenses and history of strong returns, should form the core of an investment portfolio. Still, some investments perform better than others and so do some money managers. With that in mind, here is one in a series of posts offering top investors' top picks for 2011.