Technology shares have fallen hard of late. Yet I believe our economy is resilient and the end of the coronavirus bear market is inevitable. The market decline also provides opportunities to add to existing positions or to initiate new positions.
Therefore today I’d like to introduce a number of FTSE 100 names that you may want to research further. This article will be followed several others so that I can offer a detailed discussion on FTSE 250 and AIM-listed stocks, as well as funds that focus on technology.
The tech sector
Broadly speaking, tech companies develop, manufacture or offer technology-based services or products. The sector encompasses a wide range of businesses, ranging from telecommunications, to personal computers, semiconductors, e-commerce, software as a service (SaaS), cloud computing, fintech, online social networks, artificial intelligence (AI), and internet of things (IoT).
We first tend to think of companies headquartered in Silicon Valley or Seattle in the US, such as Amazon, Apple, Google, or Microsoft, when we mention tech stocks. Nonetheless the UK also has promising technology businesses with plenty of scope for future growth.
London Stock Exchange’s techMARK market “was launched in November 1999 by the Exchange to create new opportunities for companies whose business is dependent on technological innovation, and for investors in those companies”.Â
And the FTSE techMARK All-Share Index comprises all companies included within the techMARK market. There are currently 33 UK-listed companies in the index.Â
The list includes large-cap as well as medium and smaller companies, which are growing fast and offer potential for impressive share price gains. Investors may use the index as a starting point for further research.
FTSE 100 shares
Our blue-chip FTSE 100 index also offers several possibilities for investors to consider. You may not necessarily think of many of them as tech stocks. Yet technology and innovation are important for their existence and growth.
And most of them are currently trading at lower multiples than we have seen in months (or even years). Here are several of business I believe will continue to offer value in the long run.
One of the most successful stocks of the past decade has been Aveva. It provides engineering and industrial software. Then there’s global defence contractor BAE Systems. Unlike many other companies whose share prices have crashed in 2020, year-to-date the stock is down, but only by 4.6%.
Telecoms giants BT and Vodafone are two tech-based names that may increasingly benefit from the current stay-at-home economy. Multinational consumer credit reporting company Experian may become another business to ride the Covid-19 wave. Many consumers and business are likely to rely on credit data as uncertainty begins to take its toll on many economies.
Stock exchange and financial information company London Stock Exchange Group may also come out of the current volatility in acceptable financial shape. The lockdown shouldn’t affect its business model much.
Engineering group Halma specialises in products for hazard detection and life protection. Although not a household name, its stock has been a robust long-term investment.
Finally, online retailer Ocado is regularly in the news. The group is currently working around the clock to answer the increase in demand for online grocery shopping. From warehouse to delivery routes, the business is highly automated. In fact, in late 2019, the group successfully sold its automated technology to Japan, a leader in robot technology.