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Dan Niles: 'More Defensive, Less Sexy Tech' Wins In 2011

All this week Fast Money has asked the Street's most respected investors for their top picks for 2011.

On Wednesday the desk turned to legendary tech fund manager Dan Niles of Alpha One Capital Partners for his insights.

Although he’s bullish on tech Niles tells the desk headwinds blowing overseas make him reluctant to go long broadly.

"What worries me is... Europe, there are credit issues there. Cisco talked about that being an issue."

“Investors are better off being in more defensive, less sexy tech," he says. “That way if the market sells off in January, they won’t get destroyed.”

Here’s what Niles tells us should be on your radar:

VERIFONE:
- EMs: cash to cashless
- POS devices 7x in US v. BRIC
- 50% of revs outside US
- HYC merger highly accretive
- HW Upgrade- smartphone pymnts

EBAY:
- eComm/mobile pymnt play
- Core Marketplace improving
- 2013: PayPal half of rev grows 20%
- 27% y/y TPV on Black Friday
-310% increase in mobile commerce
- Partners: APPL, GOOG, DFS, PAY

ORACLE:
- Stealth cloud play
- Fusion Software launch CQ1
- Avg deal size increasing
- Sun drives new revs stream
- Cloud play: next gen data center
- Valuation is low vs. growth rate

And Niles suggests shorting European banks such as Banco Santander , BBVA , Lloyds and HSBC against these positions “as a hedge against market risk."




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