BlackRock's Richardson: We Really Like U.S. Mature Tech Companies

While young Internet and app start-ups are getting record valuations and the NASDAQ is on its way to touch the 5,000 mark, some of the mature tech companies including Intel Corporation INTC, Hewlett-Packard Company HPQ and International Business Machines Corp. IBM at a lower multiple than the overall market.

Heidi Richardson, Global Investment Strategist at BlackRock, Inc. BLK was on CNBC to recently to talk about why these mature tech companies are the most ‘attractive’ investments currently.

The NASDAQ Is Approaching 5,000, Is It Making You Nervous?

“No, it actually doesn’t,” Richardson replied. “Its’ really interesting when we look at the valuations in the U.S. market place, it’s arguably rich, but when you look at the opportunity side on the sector [sampling], we really like these U.S. mature technology companies. Valuations at these companies are trading at very attractive valuations compared to the broad market.”

Why Do You Consider The Valuations Of These Companies ‘Attractive’?

“Yeah, I mean if you look at it on a relative basis, with the market getting rich in the U.S. marketplace , with technology, particularly these mature technology companies, their valuations haven’t been stretched from just expansion of valuations, it’s actually been the earnings keeping up with the price to earnings ratio,” Richardson answered. “So, they are still relatively cheap trading at 13 times, compared to the broad market at about 17.”

Volatility To Pick Up

“If you think about the diversified exposure, we are anticipating volatility picking up in the U.S. marketplace this year,” Richardson said. “With the VIX at 15 and arguably the long-term average is 20, we think that having a diversified exposure to the semiconductor, hardware, software makes a much better investment for consumers moving forward.”