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countrywood  
#1 Posted : Thursday, January 25, 2018 7:56:50 PM(UTC)
countrywood

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I am researching Manhattan Associates and Fabrinet, Inc. Both come up as technology sector. My portfolio is pretty heavy in tech, but everything that sounds like a good company because they provide a useful service or product is classified under tech. I am beginning to feel like any company that uses a computer is classified under tech. In considering these companies, can I quit worrying about the sector?

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gerlach  
#2 Posted : Monday, January 29, 2018 10:41:34 PM(UTC)
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Yes, sector level classifications can be quite broad, and the performance of particular companies within a sector, no matter what their industry classification, can vary significantly from other companies within the same category.

For instance, Air Lease, the airline leasing company, is classified by Morningstar as being part of the Rentals and Leasing industry group. But it's really a financial stock, as well as a transportation company, so it spans several categories.

Sector and industry classifications are helpful but are not written in stone.
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countrywood on 1/30/2018(UTC)
Pawche  
#3 Posted : Tuesday, February 13, 2018 2:37:34 PM(UTC)
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My club and my personal portfolio have a similar issue. It does seem like any company that uses computers or software in their service or product is classified as a tech company. One way we use to differentiate these "tech" companies is to look at the market they serve. Some serve specific industries while others have a broader base. For instance, Ellie Mae (ELLI) uses technology to streamline the mortgage application and acceptance process. It will be closely tied to the real estate industry. NIC, Inc (EGOV) is also considered a tech company but mainly helps governments use the internet by designing,monitoring and running government web sites including fee payment sites. A tech company but a much different market served.
Besides markets served tech companies can be differentiated by what they provide to customers. For example they may provide hardware, software, services or a combination of these.
By looking at market served and how a company serves its customers we avoid tech companies in our portfolio that directly compete with each other in large portions of their business.

Russell Malley
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countrywood on 6/1/2018(UTC)
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