Shunned by many once-burned investors, there are still solid businesses to be found.
Think of America's technology-rich NASDAQ market, and blockbuster stocks such as Microsoft (NASDAQ: MSFT.US), Apple (NASDAQ: AAPL.US) and Google (NASDAQ: GOOG.US) quickly come to mind.
Here in the UK, meanwhile, think of our own FTSE's information technology sector, and blockbuster businesses come decidedly less easily to mind. Indeed, the sector itself is a mere minnow. Last time I looked, it made up just 1.5% of the FTSE 100 by market capitalisation.
What's more, many investors actively shun it -- even though the dotcom crash was 12 years ago.
Here be turkeys
In part, that caution is understandable. 2010's hot hi-tech flotation Promethean World (LSE: PRW), for instance, promptly sank like a stone. Floated at 200 pence, the share price slid on the back of bad results and profit warnings. It duly hit 50 pence, and has pretty much stayed there ever since, with Promethean's shares changing hands today at 45 pence.
And last year, Micro Focus International (LSE: MCRO) -- a FTSE 250 business with a track record stretching back almost four decades -- also hit the buffers on the back of slumping sales forecasts. The share price tanked by 50%, and has lagged the FTSE ever since.
More recently, Facebook (NASDAQ: FB.US) has famously highlighted the dangers of over-hyped information technology shares. Floated at $38, the shares are $32 as I write -- with lawsuits piling up from aggrieved investors who've suddenly realised that they've bought a turkey, not a tech titan.
Dogs and divas
Yet, the FTSE's information technology sector does have some decent businesses.
Even Micro Focus is a decent business, albeit one with flawed forecasting processes. I owned its shares in the 1980s and 1990s, and could certainly envisage holding them again.
Autonomy -- recently acquired by Hewlett-Packard (NYSE: HPQ.US) -- was another decent business, although its shares were always a tad too pricey for me. But not for HP, clearly, which last year forked more than $10.2bn to buy the business.
And the good news for investors? There are other decent information technology picks out there.
Over on one of the Fool's popular discussion boards for income investors, for instance, FTSE 100 enterprise system business Sage (LSE: SGE) has recently hoved into view, thanks to a forecast yield now standing at 4.4%, and a reasonable-looking price-to-earnings (P/E) ratio of 12.
Fly by night? I don't think so. With 800,000 business customers in the UK alone -- from single-person start‑ups to stock-exchange giants -- Sage has a revenue model that Facebook can only envy. Not to mention a darn sight more paying customers.
Microprocessor designer ARM Holdings (LSE: ARM) is another FTSE 100 business, and is of a similar vintage to Sage, tracing its roots back to Acorn Computers, which made the BBC Micro in the 1980s. Apple, which co-founded the business, remains a major customer, and today ARM's low-power chips are used in almost all the world's smartphones.
On a forecast yield of just 0.9%, income investors certainly won't be interested. The investment thesis? On prospective P/E of 29, ARM is rated as a growth share for the long term.
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Finally, let's look at FTSE 250 share AVEVA (LSE: AVV), which -- founded in 1967 -- is actually older than both Sage and ARM. And again, it's a solid business with a broad customer base.
With a global network of offices employing some 800 people spread over 23 countries, AVEVA serves the world's plant, power and marine industries, developing integrated engineering software that embraces every aspect of major engineering projects, from initial 3D design through to procurement, materials management and project control.
Again, it's not one for income investors, offering a sub-par forward yield of 1.9%, and rated at a P/E of 19. But with a track record of delivering rock-solid growth in sales revenues and earnings per share, AVEVA -- like ARM -- offers decent prospects of long-term growth.
Up and coming?
Nor is the main market the only option for investors. As I've remarked before, web‑based commerce is growing in the UK at roughly twice the rate of economies such as the United States.
And that might -- might -- spell opportunities for innovative British IT firms to both grow rapidly here in the UK, and spread their wings abroad. Further research is required, of course, but AIM-traded @UK (LSE: ATUK), Blinkx (LSE: BLNX) and Bango (LSE: BGO) could be worth keeping an eye on. For there was a time, of course, that Sage, Autonomy, ARM and AVEVA were that size, too.
But perhaps, though, information technology simply isn't for you. And if so, you aren't alone. For many investors, the lessons learned in the dotcom crash were tough ones -- even if businesses with the qualities of ARM, Sage and AVEVA seem far removed from doomed-to-fail dotcom dogs such as boo.com.
So for three other FTSE sectors showing promise -- and also stuffed with decent businesses -- take a look at this free report from The Motley Fool -- "Top Sectors Of 2012". There isn't, I guarantee you, a boo.com to be seen, and what's more, I hold several of the shares covered myself.
But I don't hold -- yet -- a relative minnow of which I wasn't previously aware. But with its substantial free cash flow and stout balance sheet stuffed with cash, I'm certainly keen to find out more.
As I say, the report is free, so what have you got to lose by requesting a copy? It can be in your inbox in seconds.
Where is the UK's leading dividend stock‑picker investing today? The identities of Neil Woodford's favourite blue chips are revealed in this free Motley Fool report ‑‑ "8 Shares Held By Britain's Super Investor".
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Malcolm does not own any shares mentioned in this article. The Motley Fool owns shares in Google and has recommended shares in Micro Focus.