We are in the middle of earnings seasons and reports are hitting the wire at a fast and furious pace. As I sift through the reports, three relatively unfollowed tech stocks have come onto my radar. All easily beat estimates, have cash-rich balance sheets, look cheap and seem poised to head higher.
Plantronics (NYSE:PLT) designs and manufactures communications headsets, telephone headset systems, and accessories for the business and consumer markets.
4 reasons PLT has upside from $39 a share:
- In its earnings report yesterday, the company grew revenues 8% YoY and beat estimates by over $10mm. It also produced earnings of 73 cents a share, five cents a share above consensus estimates.
- The company has a robust balance sheet with over $300mm in net cash on the books (around 20% of current market capitalization). It also pays a dividend of 1%.
- The company has now beat earnings estimates for 12 of the last 13 quarters as analysts underestimate Plantronics's earnings power.
- The stock sells at 13.5x forward earnings, a discount to its five-year average (17.6).
Dolby Laboratories (NYSE:DLB) provides products, services, and technologies for various stages in the content creation, distribution, and playback process in the entertainment industry worldwide.
4 reasons DLB is undervalued at under $32 a share:
- The company reported GAAP earnings of 50 cents a share yesterday, five cents better than estimates. It also beat on the revenue side by about 7% over consensus.
- Dolby has a robust balance sheet with almost $800mm of net cash on the books (Approximately 25% of market capitalization).
- This is the third straight quarter the company has beaten consensus earnings by around this percentage. The stock trades at approximately 8x operating cash flow.
- DLB trades at 15x forward earnings, a discount to its five-year average (20.4). Subtracting net cash, the stock is trading at less than 12x forward earnings.
Multimedia Games Holding Company (NASDAQ:MGAM) designs and manufactures gaming machines, video lottery terminals, and associated systems and equipment.
4 reasons MGAM should go higher from $14 a share:
- The company reported earnings this morning of 24 cents a share, 11 cents better than estimates. Revenue also beat consensus by some 10%. The company raised EPS and revenue guidance for 2013 as well.
- The company has net cash of some $40mm on its books which equates to around 10% of market capitalization.
- The firm has now crushed earnings estimates each of the last 7 quarters. The average beat over consensus over the last five quarters has been just under 50%.
- The stock sports a cheap five-year projected PEG of under 1 (.87) and the median price target by the three analysts that cover the stock is $19 a share. Based on this latest report, I would look for price targets to be revised higher in the coming weeks.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MGAM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.