Any tech investor will tell you the last week was horrific, especially for more momentum-oriented tech companies. But adversity brings opportunity, especially in the stock market. A new research report from RBC cautions that volatility might not go away anytime soon, but it urges investors to take advantage of the sell-off to buy high-quality, cash-generating assets that are fundamentally well positioned for several years. Other top firms we cover are also coming out with shopping lists of top stocks to buy that have been put on sale.

Three stocks fit the bill now at RBC, and they are ideal for investors looking to stick a toe into the tech area, but wary of another leg down in the market. All three are rated Outperform at RBC and are suitable for growth portfolios with a little extra risk tolerance.

Amphenol

This industry giant is gaining business from Cisco, and others could be ready to step up to the plate with even more top tech companies. Amphenol Corp. (NYSE: APH) is one of the top picks this year at RBC, and the analysts see the company benefiting from the Cisco strength as about 4% of total sales are to Cisco. Amphenol is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. Amphenol designs, manufactures and assembles its products at facilities in the Americas, Europe, Asia, Australia and Africa and sells its products through its own global sales force, independent representatives and a global network of electronics distributors.

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While the RBC team sees the Cisco improvement as net-neutral for the company, they note that Amphenol’s information technology (IT) and data communication revenue increased in the June quarter, but it was somewhat offset by networking and storage. They do model the IT and data communications business to grow as a result of the Cisco guidance.

Amphenol investors are paid a small 1.13% dividend. RBC has a $64 target price on the stock. The consensus price target is $60.42. Shares closed trading on Tuesday at $49.59.
Avago

This company recently made big headlines with a blockbuster buyout of chip giant Broadcom. Avago Technologies Ltd. (NASDAQ: AVGO) was originally a part of Hewlett-Packard and gets a huge chunk of its business from Apple and Samsung. They are big providers in the cloud/hyperscale data center and networking sector. In fact, the company recently announced it will demonstrate its latest optical transceiver technologies for next generation data center and enterprise storage applications. As data center networks transition to 100G speeds to support higher bandwidth demands, technical challenges emerge across various levels of the network from storage endpoints to servers to top-of-rack and core switches.

The RBC team feels flat out that the purchase of Broadcom will add earnings-per-share power to the company. They also think that with the addition of Broadcom the market should reward the company with a higher multiple. Higher multiples would ultimately equal a higher stock price. Many on Wall Street see the stock as a benefactor of what is called “cycle dynamics.”

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RBC has a $150 price target on Avago, though the consensus target is $162.35. Shares closed on Tuesday at $108.51.

CDW

CDW came back from private equity land with a highly anticipated IPO, and it had gone straight up in price for almost two years until a serious dip in July following earnings. CDW Corp. (NASDAQ: CDW) provides IT products and services to business, government, education and health care customers in the United States and Canada. It offers discrete hardware and software products to integrated IT solutions, such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.

This company is one of the stocks that the RBC team highlights as having absolutely no exposure to China. While some of the China concerns may be overblown, the volatility and tumbling stock market there will keep the volatility high. They also think that the company will benefit from the integration of U.K. IT services and solutions provider Kelway.

CDW investors a paid a small 0.7% dividend. The stock is rated Outperform with a $43 target price. The consensus target is $43.33. Shares closed most recently at $37.55.

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These RBC ideas make perfect sense for investors looking for value, but also looking to avoid a meltdown should the market take another leg down. They all make good additions and have weathered macro challenges in the past better than their peers.

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