Technology is the only area where companies are beating revenue estimates and it is where investors should be positioned, said Mark Demos, portfolio manager at Fifth Third Asset Management. (See his stock picks, below.)
“Most companies are missing the revenue but making good bottom line estimates. Technology companies are beating both top-line and bottom-line,” Demos told CNBC.
At the beginning of the recession, “tech companies reacted very swiftly and now they are beating expectations,” he said.
Demos said the tech sector will continue to perform well through the end of the year.
“In the next months, you may have concerns about inventory build and I think that’s part of it. I think you should be well positioned in technology for the end of the year for sure,” he said.
One of the biggest areas to invest in is mobility—getting information anywhere and anytime, said Demos.
“Smartphones and netbooks—those will see very good growth over the next year,” he said. “With both of those products, you’re still in the early stages of very solid growth and you want to invest in companies that have the technologies that make those products happen.”
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Demos’ firm, Fifth Third Asset Management, owns shares of Broadcom, Intel, Apple, and Qualcomm.