Eaton Vance’s Lew Piantedosi highlights continued value in technology equities
Lew Piantedosi, Eaton Vance portfolio manager, has outlined the reasons why he feels there is still value in technology equities.
In a bullish market environment, you expect more cyclical areas of the market to be leaders. However, this year the market is being led by the more “defensive” sectors, such as consumer staples, health care and telecom, due to the earnings predictability and stability of these sectors over the uncertainty of more cyclically exposed areas.
The tech sector offers the best value in the market today. Big picture, long term trends such as big data, cloud computing, desktop virtualization, secure networks and mobile computing are still in their infancy and poised to become huge growth drivers for those companies. Investors can buy access into these long term growth trends at very reasonable, historical, low relative valuations.
The recent choppy global economic environment, the budget sequestration and general uncertainty has prompted many short term focused investors to abandon ship, driving valuations for the group to extremely attractive levels. As the economic environment continues to improve and the effects of sequestration fade, quarterly results are likely to show accelerating growth. We believe it’s prudent to take a longer view and look for opportunities in the un-loved, undervalued growth of the tech sector.