Looking to play the next evolution in technology? Well, there are lots of options out there confusing investors.
Do you bet on the continued dominance of Apple (NASDAQ:AAPL) or Google (NASDAQ:GOOG)? Do you start chasing small-caps with big potential, such as the newly minted big data play Splunk (NASDAQ:SPLK) which went public in 2012?
And even if you do all the research and decide to bet on any of these companies, how do you ensure you’re actually in on the ground floor instead of just arriving late to the train after the big investment banks, venture capitalists and hedge funds get paid first?
One way investors can get in on the ground floor of the next era in high-tech companies is to invest in funds instead of picking individual stocks. And one of the best options out there according to investment guru Charles Sizemore is the small closed-end fund GSV Capital (NASDAQ:GSVC).
The reasons he likes GSVC include:
- A net asset value of $259 million, of which $26 million was cash. At the current market cap of $170 million, GSVC is trading at a 35% discount to the value of its portfolio.
- Under the hood, we see that there is a lot more to GSVC than just social media companies including big Web 2.0 operations.
- Facebook (NASDAQ:FB) has stabilized and a Twitter IPO could boost not just the valuation of the this top component in the fund, but also all underlying assets in other social media and tech companies including Drop Box and Violin Memory once investors start to move up their valuations for the entire group of up-and-coming tech stocks. Twitter is 14% of the portfolio.
- “Very reasonable” chance for triple-digit returns if we see mean reversion on net asset value, a good Twitter IPO and buzz return to the technology space.
Listen in and weigh in below. Do you think social media, cloud computing and the like are going to come back into favor this year? Is GSVC on your radar?
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.