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  • Editor’s Picks / 29 April 2015 at 11:20 GMT

    Could tech stocks weather a market correction?

    We are six years into a US bull market, and some investors are getting nervous. Although tech stocks may be associated in the popular imagination with frothy valuations and the dot-com crash, MarketWatch's Philip Van Doorn says that tech equities are actually rather cheap at the moment. According to Van Doorn, "[the] information-technology sector is trading for 16.1 times forward earnings, compared with a 15-year average of 18.2". One of the metrics that best underscores this situation is the PEG ratio, which measures price-to-earnings-to-expected-EPS growth. According to this metric, companies like Micron Technologies and Avago show themselves likely to be poised for growth. Even high-flying Apple could weather a market storm fairly well, says Van Doorn, adding that "it looks attractive, considering the company’s sales and profit growth rates".
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