4 Safe Small-Cap Tech Stocks To Play Brexit

Following Britain’s vote to leave the European Union (EU), markets across the world have grown restive. In this situation, large- to mid-cap technology stocks having exposure to the European market have suffered immensely, as investors feared these firms will be up against regulatory overhangs, currency fluctuations and skill shortage.

But, most small caps from the sector are unperturbed, thanks to their minimal exposure to the global economy. Hence, it will be prudent to invest in such fundamentally solid small-cap tech stocks for enticing returns. We have also selected such stocks that have a low beta, which keep them immune to Brexit induced market volatility. Also, demand for technology and innovation is always at a high, which will help technology stocks to report above par earnings than stocks from other sectors.

Brexit Sparks Volatility, Weighs on U.S. Stocks

Defying expectations, British voters decided to leave the EU on Thursday, a stunning development indeed as it is the first country to do so in the bloc’s 59-year history. The outcome went against the prediction of the U.K. bookmakers who were pointing to a win for those willing to stay in the EU.

U.S. stocks tanked on Friday after investors feared that such an outcome will destabilize the region’s economy, slow down global growth and create fresh bouts of volatility in the financial markets worldwide. The S&P 500 and the Dow wiped out year-to-date gains and were off more than 3% at the end of Friday’s session, while the fear-gauge CBOE Volatility Index (VIX) jumped to its highest percentage rise since Aug 8, 2011.

Tech Behemoths Reel on Brexit Vote

Needless to say, tech stocks weren’t spared either, with the tech-heavy Nasdaq plunging 202.06 points or 4.1% to end at 4,707.98 during the last trading session, its worst one-day percentage decline since Aug 2011. Almost all the major tech companies in Silicon Valley weren’t able to dodge the bloodbath. Cupertino-based Apple Inc. (AAPL - Analyst Report) , Mountain View-based Alphabet Inc. (GOOGLAnalyst Report) and Menlo Park-based Facebook, Inc. (FB - Analyst Report) slumped 2.8%, 4.2% and 2.6%, respectively, on Friday.

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