Investors in technology stocks have done well over the last year. According to figures from the FT, the technology sector has risen by about 25% in that time. That’s more than double the 12% managed by the FTSE All-Share index, although it does lag the 31% gain delivered by the AIM market.

I’m mentioning this today because the SIF portfolio hasn’t really had much exposure to technology stocks over the last year. Although former holding XLMedia and current holding Taptica International are technology businesses, they are also marketing operations. Both are classified as Consumer Cyclicals rather than Technology companies.

Today I’m going to follow up on my piece from two weeks ago, where I looked at the portfolio’s sector allocation. I found that my stock-picking rules have left the portfolio overweight in sectors such as Industrials, which have outperformed over the last year.

At the same time, the portfolio’s exposure to underperforming sectors like Energy and Telecoms has been limited. This has helped the portfolio deliver a 1-year gain of 25%, versus 12% for its benchmark, the FTSE All-Share.

The strong performance of the Technology sector has left me wondering why my stock screen hasn’t highlighted any opportunities in this area over the last year. As far as I can tell, it’s mainly a question of valuation. Interestingly, four tech stocks qualify for the relaxed version of my screen, which looks at slightly more expensive stocks. So if recent falls continue, one or more of these stocks could soon qualify for the SIF Portfolio.

Amino Technologies

Television set-top box maker Amino Technologies will be familiar to readers of Paul Scott and Graham Neary’s excellent small cap reports. It’s an affordable looking business with strong cash generation and a decent record of growth.

I’ve previously been uncertain about the long-term outlook for this business, suggesting that the functionality provided by set-top boxes may soon migrate into the cloud or be built into televisions. So far my caution seems to have been misplaced.

In its recent interim results, Amino discussed the opportunities that are arising from its ability to update the software of legacy boxes. This means that cable network operators can upgrade their networks to new IP-based services without the cost and complexity of having to…

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