Your instant 5-share technology portfolio

Take advantage of a booming industry with these five stocks.

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Technology is playing a bigger part of our lives every day and as an investor, it's important to take advantage of what people will be using more and more of as time goes by. The ASX is offering up a plethora of good buy ideas for an investor looking to take part in the technology sector, here are five worth adding to your watchlist.

  1. Vocus Communications (ASX: VOC) owns and operates a global telecommunications network between Australia, New Zealand, Hong Kong, Singapore and the US. It provides internet, data centre, voice, fibre and Ethernet services to telecommunications markets. Like many of the stock in the industry, the company operates at a robust earnings ratio but with a small capitalisation and history of solid growth, its share price is likely to go higher in the medium to long term.
  2. Amcom Telecommunications (ASX: AMM) is a technology play providing information, communication and technology to business and government. The company reported strong first half results to 31 December 2012 and pays a 2.8% fully franked dividend.
  3. Integrated Research (ASX: IRI) is small cap that develops and supplies performance monitoring technology for business applications. Since 2011, the company has increased almost 300% but continues to maintain a good long term outlook. With a healthy balance sheet and dividend to match, IRI provides healthy small-cap exposure to a booming industry.
  4. M2 Telecommunications (ASX: MTU) recently purchased Dodo, Eftel and Primus Telecom and has an interest in small technology and software companies internationally. Investors are expecting healthy returns from this stock as it is yet to fully realise the effects of its acquisitions. After a smooth integration of Primus telecom, management have shown it is up to the challenge of providing growth for shareholders.
  5. Technology One (ASX: TNE) is a software and services company that has operations in Australia, New Zealand, Asia, UK and the south Pacific. The end-to-end enterprise software provider has returned extremely well over the past five years and has paid dividends along the way. The company has healthy balance sheets and is continuing to increase profit, most recently in the half year to 31 March 2013, it recorded an increase of 17% PBT.

Foolish takeaway

Investing comes with risks inherent to the stock, industry and market in general.  It's important to diversify your investment across different stocks and assets in your overall wealth portfolio in order to mitigate any potential losses.

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Motley Fool contributor Owen Raszkiewicz owns shares in M2 Telecommunications.

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