A few of tech's laggards could soon become leaders.
Technology stocks, tracked in part by the Technology Select Sector SPDR Fund (XLK), have had a banner year, with the XLK rising 46% in 2019 and hitting a new 52-week high on Thursday.
But in the quarter starting Oct. 1, several high-profile names have sat out the rally. While the XLK has climbed more than 12.5% in the fourth quarter, IBM is down nearly 7.5%, Cisco is down more than 3%, Texas Instruments is down over 2% and Western Digital is down nearly 1.5%.
Quint Tatro, chief investment officer at Joule Financial, sees signs of life in one particular stock: Cisco.
"This is a name that ... broke out in 2018, had a huge run, got way ahead of itself, was up 70% from the 20-year consolidation phase, so, this pullback we view as very, very healthy," Tatro told CNBC's "Trading Nation" on Thursday.
"This is a … company, fundamentally, that has a history of around 20% return on equity. They have about a 50% dividend payout, so they're compounding their book value 10% per year," Tatro said. Book value refers to what the company would be worth if it liquidated all of its assets and paid its debts.
With Wall Street slowly getting more bullish on Cisco's prospects — Barclays said Thursday that it believes the company will see key improvements in multiple product lines in 2020 — Tatro wasn't shying away from the downtrodden name.
"We feel earnings will reaccelerate in the next several quarters, and investors get a 3% dividend to wait," he said. "So, yeah, it's not a high-flying, growth-type company, but on this pullback, a value play that we like very much. We own it [and are] looking to buy more."
Bill Baruch, founder and president of Blue Line Capital, wasn't as sweet on Cisco.
"This gap that it's facing from [the] November drop is going to bring resistance. It failed at a gap in September already; we know what it does at these gaps. So, I'm pretty downbeat on them right now," Baruch said in the same "Trading Nation" interview.
Western Digital also looked "unenthusiastic" to Baruch, who said the stock appeared to have "no direction" after falling for most of 2018.
"There's been previous peaks, it's been moving lower longer term, so I'm still very worried about this unenthusiastic tape," he said. "The [late October, post-earnings] gap's going to bring a lot of resistance."
Texas Instruments, however, was "a different story," Baruch said.
"We made a new all-time high in Texas Instruments in October. There's a great channel you can see here in this chart. Ultimately, yeah, the gap [at $128.50] worries me ... but we're starting to settle in a bit," he said.
In short, Texas Instruments' strong uptrend has made Baruch bullish on the semiconductor manufacturer.
"I think there's going to be a buying opportunity," he said. "I like Texas Instruments and I think we're going to see this thing continue to trend higher."
Cisco closed Thursday more than 2.5% higher, while Texas Instruments was nearly flat. Western Digital also ended the day up more than 2.5%, and IBM finished up about one-tenth of 1%.
Disclosure: Joule Financial owns shares of Cisco.