The white hot technology sector is one of the big investment stories of 2017.

The benchmark Technology Select Sector SPDR ETF (XLK) has generated a whopping year-to-date return of 31.67%, nearly twice the YTD total return of 16.68% for the S&P 500.

Tailwinds propelling tech companies include robust economic growth in the U.S. and around the world, huge cash reserves, greater economies of scale, confident consumers, and rapidly advancing innovation. The latter quality — rapidly advancing innovation — is the specialty of our portfolio holdings.

Another batch of quarterly operating results are in for our portfolio holdings and the news is good across the board.

Quarterly earnings are when companies stand and deliver, when the hype is separated from reality. It’s when the rubber meets the road.

Let’s take a look at the latest report cards, with my re-examination of the respective BTP buy ratings.

Portfolio Quarterly Report Cards

• BioTelemetry (NSDQ: BEAT)

The mobile and wireless medical technology company posted the highest quarterly revenue in its history of $81 million, a 52.7% year-over-year increase. The revenue jump was driven by BEAT’s acquisition of LifeWatch AG and increased patient volumes.

This performance represented the 21^st consecutive quarter of year-over-year revenue growth. The company recorded adjusted earnings of $5.8 million.

The company incurred a net loss in the quarter of $2.3 million, or a loss of $0.07 per share, compared to net income of $4.2 million, or $0.14 per diluted share, in the same quarter a year ago. The decline in net income resulted primarily from the expense of buying LifeWatch. I think this investment in future growth will pay off.

On an adjusted basis, net income for the third quarter 2017 was $5.8 million, or $0.16 per diluted share. This compares to adjusted net income of $6.6 million, or $0.21 per diluted share, for the third quarter 2016. 

Biotelemetry remains a leader in the remote cardiac monitoring field. As the population continues to get grayer, demand will only grow for the company’s products. The survival of Obamacare has been a plus for the company, because it means Medicaid and Medicare coverage will continue to expand, funneling increasing numbers of patients to BEAT.

The telemetry monitoring field in general and BioTelemetry in particular are expanding their range of services to detect many maladies beyond just cardiac problems.

BioTelemetry remains a buy up to $37.

• Himax Technologies (NSDQ: HIMX)

Himax continues to be a standout investment in the virtual reality/ augmented reality (VR/AR) industry.

Himax currently supplies display circuits to the most popular brands in VR/AR reality headsets. The company’s third-quarter results were largely positive.

Himax’s third-quarter revenues came in at $197.1 million, for an increase of 29.9% sequentially and a decrease of 9.6% year-over-year.

Net income for the third quarter was $3.7 million, or 2.1 cents per diluted ADS, compared to a net loss of $0.6 million, or 0.4 cents per diluted ADS, in the previous quarter and net income of $13.6 million, or 7.9 cents per diluted ADS, a year ago.

Third quarter revenues and earnings per diluted ADS came in at high end management’s guidance.

Himax Technologies is on the cusp of high earnings growth. The consensus forecast from 11 analysts is bullish, with earnings per share (EPS) estimated to soar from current levels of $0.109 to more than double over the next two years. Over the same time frame, net income is predicted to jump from $19 million to $101 million over the next two years.

Himax in the third quarter achieved both top and bottom line growth across all major product categories. Particularly encouraging is the company’s joint announcement with chip maker Qualcomm (NSDQ: QCOM) to launch its 3D sensing product.

Qualcomm plans to use Himax camera technology in its smartphones to leverage growing demand for apps requiring 3D graphics. This end use goes beyond gaming and offers many industrial, enterprise-wide applications.

3D sensing is a game-changing tech breakthrough for Himax that should prove a growth driver in future quarters.

All that said, Himax is now trading far above our buy limit of $7.50. Himax for now is a hold; buy on the dips.

• IAC InterActiveCorp (NSDQ: IAC)

IAC’s revenue reached $828 million in the quarter, for a year-over-year increase of 8%, exceeding the consensus estimate.

Adjusted EPS came in at 55 cents, down 26% from a year ago, missing expectations.

Wall Street isn’t concerned about the earnings miss; neither am I. Most of the earnings shortfall can be attributed to the company’s purchase of Angie’s List, which should prove a major growth driver in future quarters.

The Barry Diller-helmed company occupies the “sweet spot” in media: digital brand names that cater to specialized niches. It operates through six segments: Match Group, HomeAdvisor, Video, Applications, and Publishing.

Media impresario Diller is shrewd enough to position his company to reap the spoils of the “nichfying” of consumer media habits. This trend will only grow more pronounced over time. Right now, IAC InterActiveCorp is making the right investments.

IAC remains a buy up to $130.

• NVIDIA (NSDQ: NVDA)

NVIDIA blew the doors off expectations that were already high on Wall Street.

California-based NVIDIA makes high-quality gaming graphics processing units (GPUs) and graphic cards that fuel VR headsets. The company also has diversified into enterprise-wide solutions.

The VR/AR chip maker posted huge beats on its top and bottom line for the fiscal third quarter. Fueling growth were expansions in its gaming, data center and auto chips divisions.

I’m particularly impressed by the company’s GPU designed for artificial intelligence purposes, which is fast becoming a blockbuster seller. Defying the naysayers, the company’s data center segment bounced back from its tepid performance in the previous quarter.

NVIDIA reported record revenue for the third quarter of $2.64 billion, up 32% from $2 billion a year earlier, and up 18% from $2.23 billion in the previous quarter. All of the company’s platforms saw growth.

EPS came in at a record $1.33, up 60% from EPS of $0.83 a year ago and up 45% from $0.92 in the previous quarter.

The company’s diversification beyond gaming and into major augmented reality end uses such as the automotive market is a shrewd strategic move that will continue to propel growth.

Promising NVIDIA technologies for business include IrayVR, which allows users to make visual and physically correct predictive designs. What more, not only is NVIDIA venturing further into the autonomous car space, but that it is also developing driverless trucks.

The applications for the transportation industry are huge. By 2035, as much as 15% of all trucks sold are expected to be self-driving. That said, the stock has enjoyed a huge run-up.

NVDA has gotten a bit pricey and exceeds our buy target; buy on the dips.

• USA Technologies (NSDQ: USAT)

The payment technology service provider racked up total quarterly record revenue of $26.5 million, a year-over-year increase of 30%. That number represents the 30^th consecutive quarter of growth. The results were for the company’s first quarter of fiscal 2018.

USAT added 504,000 connections to ePort service, representing a year-over-year increase of 26%. The company also added 500 customers to achieve a record 12,400 total customers compared to 10,750 as of a year ago, a year-over-year increase of 15%.

The company posted a net loss of $(0.2) million, or $(0.01) per share, compared to a net loss of $(2.5) million, or $(0.07) per share for the prior year period.

But here’s the figure to watch: adjusted EBITDA came in at $2.3 million, for a whopping year-over-year increase of 244%. Earnings took a hit in the quarter from strategic acquisitions that should pay off down the road.

USAT continues to dominate the fast-growing niche of wireless, cashless payment and machine-to-machine payment solutions for small, self-serve retailers.

USAT exceeds our buy target; buy on the dips.

• Web.com Group (NSDQ: WEB)

The global provider of Internet and marketing services for small businesses reported a strong third quarter.

Revenue reached $188.6 million in the quarter, compared to $190.7 million for the third quarter of 2016. Results were at the high end of guidance. Net income was $8.3 million, or $0.16 per diluted share, representing a 4% net income margin.

Adjusted EBITDA was $48.8 million for the third quarter, representing an adjusted EBITDA margin of 26%, surpassing the high end of the company’s adjusted EBITDA guidance of $46.5 million to $48.5 million. 

The Florida-based business has carved out a specialty that represents an unstoppable trend. The company provides domain name registration and web development services, focusing on small and medium-size businesses. The company also offers a variety of subscription services.

Small business start-ups are proliferating, as workers leave corporate ranks to strike out on their own. As more and more people join the ranks of home-based entrepreneurs and business owners, Web.com will enjoy multi-year growth.

Web.com remains a buy up to $24.

The Watch List

In my last portfolio update (Friday, November 3), I brought augmented reality leader Vuzix (NSDQ: VUZI) to your attention and added it to my “watch list.” My favorable impression of the company was confirmed on November 9, when the company reported blow-out operating results.

With a market cap of $111.9 million, Vuzix is a U.S.-based provider of augmented reality solutions for the business enterprise. Vuzix M100 Smart Glasses are an Android-based wearable computer with several pre-installed apps, enhanced with an onboard processor, recording features and wireless connectivity. The M100 is designed for a wide variety of business-related functions. The company makes an upgraded and enhanced version called the M300.

The company posted its third consecutive quarter of sequential growth and record revenue. Revenue for the third quarter came in at $1.4 million, a year-over-year increase of 141%. Vuzix quarterly smart glasses revenues surpassed $1 million for the first time in the company’s history, with $1,027,397 of sales, a year-over-year increase of 171%. That represents sequential growth of 45% compared to the second quarter of 2017.

Vuzix also builds customized smart glasses for Toshiba Client Solutions, a wholly owned subsidiary of Tokyo-based electronics firm Toshiba (OTC: TOSBF). The company recognized $266,687 of engineering services revenues during the third quarter on its enterprise smart glasses development project with Toshiba.

The increase of revenue for the 2017 quarter was primarily the result of M300 Smart Glasses sales and engineering services for a specialized version of its smart glasses for Toshiba. This partnership is expected to bear full fruit in 2018.

The remaining development work associated with Toshiba is expected to be completed in the fourth quarter, which will result in approximately $221,000 of revenue in the fourth quarter and the delivery of production validation test (PVT) devices. Vuzix expects to move this new product into volume production for Toshiba in early 2018.

However, largely due to heavy investments in the Toshiba development deal, the company posted a net loss in the third quarter of ($0.28) cents per share versus a net loss of ($0.32) for the same period in 2016.

Vuzix enjoys several tailwinds. More than 350 pilot projects in 45 countries around the world are using the company’s M300 product. Many of these companies are looking to implement the M300 across their enterprises.

If only 20% of these clients pick up only 1,000 units of the M300, it would result in at least $70 million in revenue. Several single accounts, such as delivery giant DHL Express, could be a huge source of future business. As these pilots mature into larger enterprise implementations, the company could reap a windfall.

At the Consumer Technology Association’s CES show in January, Vuzix plans to introduce a new smart glass product called the Vuzix Blade, which features a see-through viewing experience.

I’ll continue to keep an eye on this stock. VUZI shares jumped 8.08% yesterday in the wake of its encouraging quarterly report card. I’ll let you know when it’s time to pull the trigger and add this stock to our basket of augmented reality holdings.

In the meantime, I’m extremely bullish on this industry, as my buy ratings for our existing VR/AR portfolio holdings attest.