Year's Worth of Tech Stock Picks and Pans Pay Off

Yes, success is a fickle creature in the tech world, where underdogs can sometimes topple titans and groundbreaking technologies can change the face of an industry. For those who follow this universe closely, there's never a dull moment. That's what makes this column — my final Techsmart — so bittersweet.

Since I began writing Techsmart in May 2006, the goal has been quite simple: To inform readers about the technologies and companies that hold the most promise and to warn them about potential train wrecks. Over these past 15 months, I've expressed such opinions on 84 tech investments. Those picks and pans have pushed the Techsmart portfolio 19.1% higher, just beating the S&P 500's 18.3% gain during the period.

My returns have been helped by some pretty strong players. Apple has been "the big story" since Day 1. I first recommended the stock in May 2006, and it has since advanced 112%. My initial premise: That Apple's MacBook computers would gain market share based on more competitive pricing, the inclusion of Intel (INTC) processors and the release of Boot Camp software, which lets Mac users run Microsoft Windows. In April, Apple reported its second-quarter earnings, announcing that Mac unit sales grew 36% year over year — much more impressive than the 10% to 11% growth that other PC makers saw.

Obviously, at the time, I didn't anticipate the release of the iPhone or Apple's foray into video downloads with Apple TV, both of which lent more momentum to the stock.

The Apple story is far from over. Steve Jobs undoubtedly has more tricks up his sleeve: A new and improved version of the iPhone perhaps with an expansion memory card slot, GPS and "push" technology for email, or maybe the much-rumored flash-based mini Macs will become a reality. In the meantime, investors will have the company's upcoming MAC OS X upgrade, Leopard, to look forward to.

Also stealing headlines this year and giving a nice boost to the Techsmart portfolio is the land grab taking place in the online ad world. Following Google's (GOOG) announcement that it would buy privately held ad house DoubleClick for $3.1 billion in April, I wrote that aQuantive (AQNT) and 24/7 Media would be next to the altar. I believed aQuantive, in particular, would reward investors whether it was gobbled up by Microsoft (my pick as suitor) or remained independent. A month later, Microsoft popped the question, offering to buy aQuantive for $6 billion. AQuantive's stock is up 109.7%, making it my most successful call of 2007. A day earlier, WPP Group (WPPGY) announced it was buying 24/7 for $649 million. 24/7's stock climbed 39.3% since my column ran.

While I tried to steer investors toward "safer" tech investments, there were a few times I recommended stocks explicitly to those with stronger stomachs. As most tech investors know, the riskier the bet, the bigger the profit potential tends to be. I took such a gamble on WiMax, the high-speed wireless broadband network being championed by companies like Intel and Sprint (S).

In separate stories, I wrote that WiMax provider Clearwire (CLWR) and Israeli wireless broadband equipment maker Alvarion (ALVR) were well poised to profit as WiMax is rolled out across the globe. Just this week Clearwire inked a deal with Sprint on the heels of two other partnerships with satellite-TV operators DirecTV (DTV) and EchoStar (DISH). Clearwire's stock is up 64% since my column ran in May. Alvarion, which is also gaining momentum with customers, is up almost 62% since I wrote about it last summer.

I also pounded the table on wireless modem maker Sierra Wireless (SWIR). Sierra has risen from the ashes, improving its gross margins and making strategic acquisitions that will help it gain further traction in a market that's expected to have an immense amount of demand. Since my May 2 story, the shares are up 53.3%.

Of course, as I've found out firsthand, sometimes those risky plays come back to bite you. The growing boom of personal navigation devices and all other things "location-based" had me bullish on GPS-chip maker SiRF Technologies (SIRF). SiRF has a pretty impressive client roster and was making more affordable technology than some of its competitors. I must have lost my way with this one, though. The stock is down 26.6% since I wrote about it in July 2006.

Also, I was premature when banking on memory maker Micron Technology (MU) last fall. I thought the company could use plunging flash memory prices to its advantage. Flash is expensive and by making it cheaper it could be used in more devices. While I said this was a long-term bet, these economies of scale have yet to pan out. The stock is now off 23% since my column ran.

I also took a hit for asserting that shares of Priceline.com (PCLN), Nvidia (NVDA) and WebMD Health (WBMD) were getting too big for their britches last fall. The three companies ended up being my biggest losers — a reminder that some things are much easier to predict in the tech world than others.

One thing I can easily predict though is that Techsmart, which passes into the capable hands of my colleague, will continue to inform readers about the iPhones, WiMaxes and Wiis of next year and beyond.