Despite the sell-off in U.S. stocks on Wednesday, some market players remain unfazed. Doug Godine, Managing Director at Signal Hill told CNBC on Thursday he sees strong growth in the tech sector, especially in communication infrastructure.
"We think it's secular, we think there's an accelerating investment in communication infrastructure and thats where we're spending most of our time," Godine, who works within Signal Hill's sales and trading business said. According to Godine, the area was enjoying above average growth rates, and was strong enough to outweigh any general risks in the market and economy.
Weak U.S. ADP and ISM reports rattled Wall Street on Wednesday, sending stocks to their lowest levels since August.
Godine however thinks talk of another U.S. slowdown are premature. "It will be pretty early to call that just given where we came from, starting in the back-half of the third quarter last year." he said, pointing to the 3 quarters of positive earnings results.
Godine is especially upbeat about the growth potential in the mobile consumer space. As more users adopt devices such as the iPad and Android smartphones, Godine believes this will raise demand for bandwith and lead to more investments in network infrastructure.
His favorite plays in the space include U.S. listed Broadsoft, Integrated Device Technology , Ultimate Software and Entropic.
Broadsoft is a pure play on cloud services. Its software, Godine said, allows carriers to offer enhanced services to customers such as Voice-over-IP (VOIP) and video.
Integrated Device Technology (IDTI) meanwhile, is centered around cloud and 4G. "Their timing solutions allow data traffic to cross the network seamlessly — as it moves from older, yet to be upgraded parts of the network to newer parts of the infrastructure and back again."
According to Godine, as more companies dispense with paper checks and move their payrolls online, this will benefit HR and payroll software companies such as Ultimate Software. The company counts Google as one of its clients.
"Right now in the U.S., we think only 3 percent of companies are using online payroll, but over time, 10-plus years that penetration rate will go to 30 to 40 percent and this will be a multi-billion dollar revenue company," Godine said.
His final pick Entropic, is a semiconductor company that designs and develops systems to connect home networks, an area in which he expects rapid growth to continue as more people adopt over the top (OTT) TV services like Google TV and Netflix.
"Entropic's technology will allow all those different content streams to connect over one gateway (like a home server), thus allowing consumers to do away with 3-4 set top boxes in each house."