8 Technology Penny Stocks to Buy Now

Dice with pencil on graph paper

Penny stock investing doesn't have to be a crap shoot on long-shot stocks. Done well, penny stocks can be a great way to diversify your portfolio and really amp up your investment profits. While penny stock investing can be risky, it can also be very rewarding.

I recommend finding bargain penny stocks traded on major exchanges, for no less than $1 a share and with a proven track record. These penny stock investments should show significant earnings growth and strong buying pressure behind shares, increasing the likelihood that these stocks will be on the way up in the very near future.

Here are eight low-priced technology stocks that fit this description. All have fared very well in 2010 and could make profitable additions to your portfolio going forward.

Tower Semiconductor ( TSEM )

Tower Semiconductor (NASDAQ: TSEM ) is an independent foundry involved with the manufacture of semiconductors. Tower's products are commonly used in consumer electronics, personal computers, automobiles and medical device products. Year-to-date, TSEM has climbed 42.3%. Even better for shareholders, the tech stock has jumped 53.3% over the past 12 months. Trading at $1.38, TSEM is a very affordable tech stock to buy at the moment.

Wave Systems ( WAVX )

Wave Systems (NASDAQ: WAVX ) produces products for hardware-based digital security. These products are normally used in identity protection, data security, digital signatures, electronic transaction integrity and network security. Since last October, WAVX has skyrocketed 173.5%. Wave has a market cap of just $183 million, but is a penny stock worth a closer look based on its recent performance.

Zix ( ZIXI )

Headquartered in Dallas, Zix (NASDAQ: ZIXI ) is an e-mail encryption service. Its service is used in the health care, financial services, insurance and government sectors. Year-to-date, ZIXI stock has jumped 60.8%. The rally is part of a larger trend, in which the stock is up 37.5% over the past five years. Last quarter, Zix reported a net profit margin of 16.4%. Trading at $2.75, ZIXI is an inexpensive stock worth buying, based on its short-term and long-term performance.

Microtune (TUNE )

Microtune (NASDAQ: TUNE ) is known for its receiver solutions for cable, automotive entertainment electronics and digital television markets. TUNE has had an up-and-down 2010, but thanks to a strong September showing, is up 28.1% year-to-date. In September, the stock climbed 27.2%, thanks in part to the announcement by Zoran ( ZRAN ) that it was planning on purchasing Microtune for $166 million. TUNE stock currently trades at $2.89.

Westell Technologies ( WSTL )

Based in Illinois, Westell Technologies (NASDAQ: WSTL ) is a holding company divided into the following segments: customer network solutions equipment, outside plant systems equipment and conference plus services. Its subsidiary Westell provides telecommunications products to telephone companies. Year-to-date, WSTL stock is up 90.8%, and the penny stock reported a net profit margin of 11.2% in its last income statement. Finally, WSTL has outperformed earnings estimates for three consecutive quarters, making it a penny stock worth buying.

ChipMOS Technologies ( IMOS )

ChipMOS Technologies (NASDAQ: IMOS ) provides its clients back-end testing services, including engineering testing, wafer probing and final testing of memory and logic/mixed-signal semiconductors. Since January, the penny stock has gained 94.4%, compared to small gains by the broader markets. Earlier in the year, the stock was trading at just 60 cents a share, and now trades at $1.37. A strong showing in September shows that this is an affordable stock worth scooping up.

RAE Systems ( RAE )

RAE Systems (AMEX: RAE ) develops and manufactures multi-sensor chemical and radiation monitors as well as wireless networks. RAE saw a huge increase in mid-September, and the stock is up 43.6% year-to-date. The stock spike occurred after it was announced that the penny stock would be acquired by a subsidiary of Battery Ventures. A quarterly revenue growth year-over-year of 17% is another reason to buy this tech stock.

Magic Software Enterprises ( MGIC )

Magic Software Enterprises (NASDAQ: MGIC ) develops, markets, sells and supports an application platform for its clients across the globe. Over the past 12 months, MGIC stock has climbed an impressive 46.9%. The biggest jump for the stock came in March when the company signed two new partners in Germany. Over the past five years, MGIC stock is up nearly 58%, proving that this penny stock has been valuable in the long run.

Top 5 Stocks for the 4th Quarter Surge. Louis Navellier details five stocks set to deliver record earnings and jump 30%-50% in the next 90 days as the big money piles in. Get their names online here, including Louis' buy-below and target prices.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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