Markets

10 Top Tech Stocks for 2011 From Firsthand's Landis (Part 2)

By Conrad Aenlle

Updated on: January 3, 2011 / 8:25 PM EST / MoneyWatch

The first half of Kevin Landis's tech stock picks for 2011 last Tuesday featured five big (or biggish) names. For his other five,* Landis, whose Firsthand Technology Opportunities Fund (TEFQX) gained 29.3 percent last year, compared to a 20 percent gain for the average tech fund in Morningstar Inc.'s database, offers MoneyWatch readers some under-the-radar selections.

Universal Display (PANL). If you have a Samsung smartphone, you may have seen Universal Display's products without realizing it. The company makes what Landis considers a better class of light-emitting devices. "If you look at the Samsung phones, they have a great-looking display," he said. Universal Display's LED "uses a lot less energy and is a fundamentally simpler device with a longer battery life and lower materials cost." The contract with Samsung persuades Landis that Universal Display "is finally starting to get commercial traction," but he concedes that "they need more than just Samsung using their products."

Rubicon Technology (RBCN). This company is in a related business, producing sapphire wafers to make LEDs and other components on the fancy end of the technology spectrum. Such wafers will come in handy as such applications proliferate. "If you want to go to really exotic, high-performance radio frequency chips or really advanced LEDs, you need to go to different materials," Landis explained. "Rubicon is a company that can get you your sapphire wafers." GT Solar (SOLR). GT is also a play on sapphire wafers. This "very cheap, very profitable" company primarily makes equipment used to produce solar wafers and ingots at "the base of the solar food chain," Landis explained. He foresees GT's value increasing as it expands into the production of equipment used for making sapphire wafers. "This is a new product area where GT is going to grow above and beyond solar, giving it exposure to advanced lighting," he said. A123 Systems (AONE). This maker of lithium-ion car battery systems "is a play on all these electric cars that are coming," Landis said. He added a note of caution - "the thing to watch out for is that some of their competitors are big conglomerates like LG and Mitsubishi that could go after them" - but he finds A123 worth the risk because of the enormous room it has to grow. "It's got a $1 billion market capitalization on a huge trend," Landis said.

Intevac (IVAC). This company makes equipment used in manufacturing computer disk drives, a dreary business without much competition. That gives Intevac healthy profits and a cheap stock. But while its main line of work is uncool, the company is trying to expand in a business that's hotter all around. "The other wrinkle is that the tech they use can also apply to solar, and they're trying to get traction there," Landis said. "That [may become] a nice, big growth catalyst."

*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.