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Daily view: RCM's Price backs mid-cap tech recovery
by Danielle Levy on Jul 28, 2009 at 10:07
Walter Price, manager of the RCM Technology trust , believes battered mid-cap tech stocks are now starting to recover and have further to rise.
Price (above) said: 'Mid caps suffered last year, as we saw the effects of recession on growth rates. Companies that previously showed growth of 50% have slowed to 10%, as a result of the slowdown. But we are already starting to see a recovery.'
Price remains upbeat on the tech sector, which he believes understands the importance of 'selling value and a return on investment' to companies in a challenging environment. He argues that a significant number of mid cap tech stocks have been doing this since 2001 and have products that fit the current environment.
Key among them is Riverbed Technology, which offers companies solutions to simplify IT infrastructure and realise capital and operational cost savings.
Price said: 'In this environment, it is doing better than forecast. These types of companies are starting to recover.'
Cloud computing is a central theme in Price's RCM Technology trust, which he is playing through salesforce.com and which provides customer relationship management (CRM) solutions and enterprise cloud computing.
Price is also bullish on the e-commerce theme and is holding Amazon in the trust, which he says is 'hitting the sweet spot' in growth terms as it continues to gain market share and weather the overall decline in retail spending in the US.
The technology specialist is also positioning the trust to benefit from emerging market growth through China Telecom and China Mobile, which he expects will soon be re-rated.
Since RCM was handed the trust's assets in April 2007, the trust has posted a 7.7% loss compared to a 7.5% fall by the Dow Jones World Technology index.
On 21 July the RCM Technology trust closed at 211.50p, a discount of 10.18%.
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