The purpose of this screen is to identify strong companies in the technology sector with prices that may have already, or very soon will be, bottoming. Of course, depending on your view, these may also be short sale candidates given they are bouncing around their 52 week lows.
This screen looks for highly liquid stocks (average of more than 1 million shares traded daily), strong short term asset positions (quick ratio greater than two), price within 10% of the 52 week low. The most recent run of this screen yielded six stocks.
Garmin (GRMN) manufactures and markets navigation systems primarily for the automotive market. It sports a healthy 2.4 quick ratio and has $6.29 per share of cash on hand, or 17% of the recent share price. It has a very good 5.2% yield and this was recently re-confirmed by the board. With the recent poor earnings announcement the board has also authorized a $300 million share buyback signaling a desire to return value to shareholders. The price has dropped sharply recently after the earnings announcement, but this could be presenting a good entry point.
MICROS Systems (MCRS) creates and manages restaurant and hotel information systems. This company does not pay any dividend but has 19% of the recent share price in cash on hand, $7.96 per share. It has a good balance sheet with a strong 2.4 quick ratio. The stock made this list due to recent downward price action following a Jeffries downgrade to hold.
NII Holdings (NIHD) through its subsidiaries, provides wireless communication services under the Nextel brand name to businesses and individuals in Mexico, Brazil, Argentina, Peru, and Chile. It does not pay a dividend. This one is rather strange in that the most recent financial statements show $8.06 cash per share on hand or 162% of the stock price! Exercise caution if you chose to trade NIHD.
Skyworks Solutions (SWKS) designs and manufactures analog and mixed signal semiconductors. It does not pay a dividend but has a very nice 4.3 quick ratio. The balance sheet is very clean with little short or long term debt and increasing retained earnings. It has 9% of the stock price in cash on hand ($1.97). As the economy improves, this well run company could be a nice proxy for the overall economy.
TriQuint Semiconductions (TQNT) is in similar markets to Skyworks providing radio frequency (RF) solutions and technology for communications, defense, and aerospace companies worldwide. TriQuint has $0.86 cash per share on hand or 18% of the recent share price. It has a solid 3.0 quick ratio with a clean balance sheet, but revenues are declining.
Note - both Skyworks and TriQuint are down in part on news that Qualcomm (QCOM) has entered their core markets. This adds a bit of caution to these stocks. However, the recent reaction to the headlines may provide a nice entry point.
Microsoft (MSFT) is a household name for software and a major supplier of technology to businesses worldwide. The stock has a healthy 3.4% yield with a rather large 28% of cash per share on hand ($8.13). It has a quick ratio of 2.75 and the balance sheet is OK, healthy but not as clean as the semi-conductors referenced above. It is trading near low of the 52 week range ($26.26 - $32.95), but this is a narrow range. Microsoft fits the profile for either a low beta trader or a dividend income play. Not a very exciting stock but if played right, it could be quite profitable.
Do your own research, this list is intended only as a starting point. You may decide to either go long or short. Given that these are playing near 52 week lows and that over the next few weeks Wall Street is likely to be edgy on news from Washington and Brussels, be careful and set stop losses. For tight money management set them close or if you prefer to manage using mental stops, at least set a wide catastrophic stop.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is only my opinion based on personal research and offered for informational purposes. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any equity, do your own research and reach your own conclusion. Investing includes risks, including loss of principal.