Looking for an historically popular industry that continues to evolve? This article from the 1960s, while techincally outdated in content, still continues some useful observations for today's investor.
In a broad sense, technology stocks cover a far wider area than the computer and applied scient group as they are generally taken to mean. Important technological changes, for instance, are taking place in the hitherto technically conservative food industry, which could materially affect its operations over the coming decade.
For the sake of clarifying this point further, let's consider microwaves, one of the great new dynamic areas of growth in electronics. Microwaves are extremely short radio waves ranging from 300 to 300,000 megacycles, with frequencies falling between the television and infrared spectrum.
The industry is just starting to pioneer the use of frequencies over 30,000 megacycles. Its application to defense and commercial communications are said to be only beginning, especially in long-range communications.
Many of the leading electronic firms, such as RCA, General Electric, American Telephone & Telegraph, Raytheon, and Philips Lamp, are now microwave-conscious. However, they have stakes in so many facets of electronics that microwave constitutes just one segment of their over-all operations. The logical way to achieve maximum results from the microwave (which is expected to double, if not triple, in the next five years) is to take positions in those companies which are heavily exposed to microwave technology.
Two of the most promising fields of microwave technology are microwave tube manufacture and microwave test equipment and components. In the former area, Varian Associates and Eitel-McCullough are heavily concentrated while Hewlett-Packard, FXR and Polarad Electronics are concentrating in the latter field.
And, of course, we have Microwave Associates, one of the leading companies in microwave technology, known particularly for its development of microwave components for the millimeter wave-length range, duplexing tubes and microwave silicon diodes. Its reputation in the microwave component area is matched only by Hewlett-Packard, FXR,Inc., and PRD Electronics division of Harris-Intertype Corp. In silicondiodes for the detection and amplification of microwave signals, its record is superior to that of any of its competitors, such as Sylvania Electric Products or Hughes Aircraft.
Most microwave companies are relatively small ones with a relatively small equity base. Their size still leaves considerable room for growth. What's true of microwave technology is also true of other dynamic areas of growth where invariably we find quite a number of companies participating. However, only a comparatively few of them would be found to be actually concentrating therein.
Take infrared, for instance. While no less than a dozen concerns have some stake in the field, only two, Barnes Engineering and Baird Atomics, are actually concentrated in this area. Especially Barnes, which has practically devoted its whole resources to that area of electronics.
For other examples of maximum exposure to a specific technology, we have the above-mentioned Baird Atomics and Farrington Manufacturing in optical scanners; Varo Manufacturing in molecular rock circuitry (the tiniest circuitry system as yet devised); Control Data and Data Control Systems in computers; High Voltage Engineering and Radiation Dynamics in particle accelerators; Loral Electronics, Edo Corporation and Sanders Associates in antisubmarine warfare; Air Products and Hofman Laboratories in cryogenics; Chicago Aerial, Technical Operations, and Kalvar Corporation in special photographic processes, etc. This list could be much longer, of course.
Because there are so many companies trying to get into the technology industry, you re going to have to be careful and choosey about where you place your money. Do your homework, look at historical performance and invest carefully.