Calling the technology sector incredibly cheap, Lee Ainslie said Wednesday that his hedge fund Maverick Capital is 17% net long tech stocks.
This represents Maverick’s largest portfolio allocation, Ainslie told participants at the 6th annual Value Investing Congress in New York City, a two-day conference for investors who emulate the likes of Benjamin Graham and Warren Buffett.
Not only are tech stocks near historically low valuations, the sector is full of strong, well-managed businesses, Ainslie said. CommScope (NYSE: CTV), a wireless infrastructure manufacturer, is a stock he mentioned as a favorite at the fund.
While some analysts believe that CommScope has seen its heyday and that spending on capital equipment in the wireless industry is declining, Ainslie countered by saying: “If you’ve tried to use an iPhone in New York City, you know it’s a ludicrous assumption.” He added that the capex spending plans of the major carriers will benefit the company in the second half of 2011 and in 2012; and that CommScope will buy back 10% of its shares outstanding over the next five quarters.
One audience member asked whether the bottom-feeding Maverick has the experience to succeed in a sector that has burned other value investors. Ainslie reminded the audience that he has a programming background, a degree in systems engineering, and led the tech investing efforts while at Julian Robertson’s storied Tiger Management.
