2. Broadcom (Nasdaq: BRCM): Good growth and value
This chipmaker seems to be right at the heart of many major tech trends. Its communications chips will be found in a myriad of new devices that will support the next iteration of Wi-Fi, known as 802.11ac. Its systems-on-a-chip approach is enabling smartphone makers to pack a lot of functions into just one semiconductor chip, allowing them to produce smaller smartphones. And the next generation of TV sets will have improved Web-streaming capabilities, with many of them sporting Broadcom chips. Broadcom chips can already found in many of Apple's (Nasdaq: AAPL) best-selling products -- the iPhone and iPad.
But investors also note that until the global economy strengthens, spending on consumer devices may be a bit tepid. Moreover, Broadcom must compete heavily on price, so even as sales are expected to rise in the high single-digits in 2012 and 2013, earnings will likely be stuck around $2.90 per share in 2012 and 2013.
Yet the long-term growth trajectory remains quite bright for Broadcom: The company has hiked spending on research and development efforts this year to more than $2 billion, which should help Broadcom stay on the leading edge as we move into the middle of the decade.
Shares look like a good deal at around 10 times projected 2012 profits.
3. Fusion IO (NYSE: FIO): Scorching growth and healthy valuations
I profiled this fast-growing data-storage supplier in May, and though shares subsequently rallied, they've been sucked back down by this tough market.
The growth trajectory I mentioned then remains intact. Sales are expected to rise around 50% in fiscal (June) 2013 to about $530 million, and hit $800 million by fiscal 2015, according to Goldman Sachs' analysts.
As I noted before, Fusion IO had cultivated strong relationships with companies like Apple, Facebook (NYSE: FB)
, IBM (NYSE: IBM)
and others. Now you can add more names to the list: "Partnerships with Cisco (Nasdaq: CSCO)
and NetApp (Nasdaq: NTAP)
are still in the early Oct. 25, stages, [and] they could become more significant contributors in the second half of the fiscal year," note Goldman's analysts.
It's hard to call this a value play, though the forward price-to-sales multiple has fallen from about six to around four in recent weeks. For a company that has long been rumored to be on the sales block, the recent sharp pullback in shares will surely heighten such speculation.
Risks to Consider: These companies may deliver tepid near-term growth as the fiscal cliff crimps discretionary spending.
Action to Take --> Looking past the possible near-term trough, these three tech companies are still very well-positioned for growth as we head into the middle of the decade. And their slumping share prices can be seen as solid entry points for the patient investor.