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Finally, the market decides to pull back and give investors with cash on the side an opportunity to buy. With the market pulling back from all-time highs, and with margin balances higher than ever, it is only natural that stocks are set to take a breather. This is, however, a stock picker's market. A focus on strong fundamentals (revenue/profit growth, dividends if applicable), solid valuations, and perhaps a dash of contrarian bravado may just be the ticket to long-term gains.

In this article, I talk about three tech stocks that took a beating in the 2/4 trading session (and, if tomorrow's no better, are likely to offer an even cheaper entry point) for your consideration.

1. Qualcomm (NASDAQ:QCOM)

I like Qualcomm, and the story is simple to understand:

  • Collects huge licensing revenue from nearly all wireless devices thanks to its vast patent portfolio touching on the key areas that drive the mobile revolution
  • Has a fortress of a balance sheet: $28B in cash, no debt, and continues to be wildly profitable
  • Supplies the chips that power nearly every 4G LTE phone in the world, giving it a near monopoly on the smartphone market in developed regions (and it is no slouch in the lower end of the market, too)
  • Is solidly backed by the sell-side analyst community with a median target price of $85/share.
  • Has been growing its sales at a ~20% clip for the last several years
  • Recently pulled a classic "beat and raise" in its most recent quarter, blowing away estimates and revising its full-year guidance upwards
  • Trades at a mere 13.5x forward earnings

At $65.64, the stock has pulled back considerably from the $67.50+ prices that we saw post-earnings. At these levels the stock is attractive, but if the broad market drags this winner down, then it seems like a solid plan to capitalize on the fear and start buying this winner.

2. Oracle (NYSE:ORCL)

Oracle is the premier developer of database software, middleware software, application software, and even hardware systems. The company is run by an excellent CEO and management team whose clear leadership has made sure that the company's fundamentals continue to march in the right direction, and that the stock consistently trades at new 52-week highs.

A few key reasons to buy Oracle on this pullback:

  • Shares of the company were down after it announced the acquisition of Acme Packet (NASDAQ:APKT) for $2.1B. I believe that this acquisition will ultimately broaden and strengthen Oracle's communications portfolio, especially as Acme Packet is widely regarded as a leader in its field
  • Oracle has a clean balance sheet, with $33B in cash and $19B in long-term debt for a net cash position of $14B
  • The company is cheap, trading at 13x expected EPS for the current fiscal year. Given the slow, but consistent growth that the company has demonstrated time-and-time again, even at a constant -- and low -- multiple, earnings growth will support continued long-term gains in the share price.

3. Microsoft (NASDAQ:MSFT)

Microsoft is a tech stock that investors love to hate. Nevertheless, it is one of the world's most successful and shareholder friendly firms on the planet today. Here are a couple of reasons why Microsoft should be a serious contender as a solid and stable part of any dividend-growth (or just tech) portfolio:

  • Fundamentals (sales and net income) are on a sustained up-trend, even if growth isn't explosive or "exciting"
  • Windows 8, while generally harped on by investors, is likely to gain more traction as more touch-friendly notebooks, and more powerful processors from Intel (NASDAQ:INTC) and AMD (NYSE:AMD) give the Windows 8 tablet experience a significant competitive advantage over its Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) counterparts.
  • With $68B in cash, $14B in debt, this juggernaut has a net cash position of $54B, giving it ample power to weather any temporary storms, make strategic acquisitions (although the company is notorious for making less-than-stellar buys), and put the pedal-to-the-metal on R&D to make sure it can stay competitive
  • The dividend yield is quite attractive at 3.3%. The dividend keeps on getting juiced, and with each bump up in the dividend, the trading range for the stock moves higher.
Source: 3 Tech Stocks Worth Considering On The Dip

Additional disclosure: I may sell puts in an attempt to buy ORCL (or profit trying)