Two "Stellar" Picks in Tech

02/12/2014 7:00 am EST


We like to buy on pullbacks, so we're watching this downturn to see if it presents any good buy opportunities. For now, we are taking small steps to avoid big mistakes, suggests Richard Schmidt. Despite his caution, the editor of Stellar Stock Alert is reaffirming his buy rating on two technology plays.

What is exciting about Netgear (NTGR) is that the company introduced a new TV dongle called the NeoMediacast. The little device was partially inspired by Google's Chromecast, which has been very popular.

As more companies come up with alternatives to cable TV, these devices will garner significant market share. NTGR will sell the device to pay TV operators, who may lease or resell it to their customers.

Netgear is aiming to replace the cable box with a USB flash drive-sized stick that gets plugged into a TV's HDMI port. If successful, this will be a huge step for NTGR. NTGR remains a buy. (CRM) ran from $55 to $61, gaining over 10% in just a few weeks. During the jump up, some firms downgraded the company, fearing it was overbought.

But the stock kept going. We don't see CRM as overbought. CRM has an awesome business model that is just now breaking into the financial sector (a huge potential market).

And management knows what it's doing. The company invented cloud services for customer management. Its customers are loyal because of the great service and the huge cost in switching companies.

With earnings scheduled to report later this month, we expect even more from the stock as we move through February. The stock is well below our buy-up-to price and looks to move more in the future. So CRM is a strong buy.

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