3 Compelling Strong Growth Tech Stocks Currently In Uptrends

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Includes: CRUS, CSCD, KLIC
by: Arie Goren

I have searched for highly profitable growth stocks that are in a short-term uptrend, in a mid-term uptrend and in a long-term uptrend. Those stocks would also have to show a very low forward P/E ratio and an extremely low debt.

I introduced in the finviz.com Screener the following demands:

  • Forward P/E - Under 15
  • Total debt to equity - Under 0.1
  • EPS growth Past 5 years - Over 25%
  • EPS growth next 5 years - Over 10%
  • 20-Day Simple Moving Average - Price above SMA20
  • 50-Day Simple Moving Average - Price above SMA50
  • 200-Day Simple Moving Average - Price above SMA200

As a result, only 11 stocks came out, six of them belong to the technology sector. In this article, I describe three technology stocks which in my opinion can reward an investor a nice capital gain. I recommend readers use this list of stocks as a basis for further research. All the data for this article were taken from Portfolio123, finviz.com and Yahoo Finance, on October 03, 2013, before the market open.

Cirrus Logic Inc. (NASDAQ:CRUS)

Cirrus Logic, Inc., a fabless semiconductor company, develops analog and mixed-signal integrated circuits for a range of consumer and industrial markets.

Cirrus Logic has no debt at all, and it has a very low trailing P/E of 10.61 and a very low forward P/E of 12.92. The PEG ratio is very low at 0.57, and the average annual earnings growth estimates for the next five years is very high at 18.57%. The price to free cash flow is very low at 9.32, and the current ratio is very high at 6.50.

The CRUS stock price is 2.31% above its 20-day simple moving average, 9.38% above its 50-day simple moving average and 4.12% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Cirrus Logic has recorded very strong revenue and EPS growth, during the last year, the last three years, and the last five years, as shown in the charts below.

Source: Portfolio123

Source: company presentation

The tables below emphasize the Cirrus Logic's superior growth rates and margins over the industry median, the sector median and the S&P 500 median.

Source: Portfolio123

Cirrus Logic will report its latest quarterly financial results on October 28. CRUS is expected to post a profit of $0.60 a share, a $0.19 decline from the company's actual earnings for the same quarter a year ago.

Cirrus Logic has recorded very strong revenue and EPS growth, and it has strong earnings growth prospects. Considering CRUS's compelling valuation metrics, and the fact that the stock is in an uptrend, CRUS stock can move much higher.

Risks to the expected capital gain include a downturn in the U.S. economy, and weakness in the consumer electronics market.

Chart: finviz.com

Cascade Microtech Inc. (NASDAQ:CSCD)

Cascade Microtech, Inc. designs, develops, manufactures, and markets wafer probing solutions for the electrical measurement and testing of high performance semiconductor chips.

Source: company presentation

Cascade Microtech has no debt at all, and it has a trailing P/E of 21.83 and a very low forward P/E of 11.83. The current ratio is very high at 5.50, and the average annual earnings growth estimates for the next five years is quite high at 15%.

The CSCD stock price is 10.80% above its 20-day simple moving average, 17.56% above its 50-day simple moving average and 30.12% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Analysts recommend the stock. The two analysts covering the stock rate it as a strong buy.

Cascade Microtech has recorded revenue and EPS growth, during the last year, the last three years, and the last five years, as shown in the table below.

Source: Portfolio123

The table below emphasizes Cascade Microtech's superior growth rates over the industry median.

Source: Portfolio123

Cascade Microtech will report its latest quarterly financial results in October. CSCD is expected to post a profit of $0.14 a share, a 40% rise from the company's actual earnings for the same quarter a year ago.

Cascade Microtech has recorded strong revenue and EPS growth, and it has strong earnings growth prospects, and considering its compelling valuation metrics, and the fact that the stock is in an uptrend, CSCD stock as still room to go up.

Risks to the expected capital gain include a downturn in the U.S. economy, and weakness in the consumer electronics market.

Chart: finviz.com

Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)

Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and expendable tools to assemble semiconductor devices.

Kulicke and Soffa has no debt at all, and it has $6.76 a share in net cash. The trailing P/E is very low at 8.99 and the forward P/E is also very low at 8.63. The PEG ratio is very low at 0.67, and the average annual earnings growth estimates for the next five years is quite high at 13.5%. The price to free cash flow is very low at 7.24, and the current ratio is very high at 7.50.

The KLIC stock price is 0.03% above its 20-day simple moving average, 0.71% above its 50-day simple moving average and 0.73% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Most analysts recommend the stock. Among the three analysts covering the stock, two rate it as a strong buy, and one rates it as an underperform.

Kulicke and Soffa has recorded strong revenue and EPS growth, during the last three years, and the last five years, as shown in the table below.

Source: Portfolio123

The tables below emphasizes the Kulicke and Soffa's superior return-on-capital over the industry median, the sector median and the S&P 500 median.

Source: Portfolio123

On July 30, Kulicke and Soffa announced its fiscal third quarter 2013 results, which beat EPS expectations by $0.11 and beat on revenues.

Third-Quarter Fiscal 2013 Financial Highlights

  • Net revenue of $141.2 million.
  • Gross margin of 46.7%.
  • Net income was $18.9 million or $0.25 per share.
  • Cash and cash equivalents were $508.5 million as at June 29, 2013.

In the report, Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said:

Revenue for the third fiscal quarter exceeded the high end of our guidance range. This sequential growth reflects a higher proportion of sales to our top 5 customers, along with a broader recovery of the sector. We are encouraged by our ability to maintain our cost structure while also maintaining our gross margins at 46.7%, above our trailing 3 year average of 46.0%. This reflects our brand premium and technology leadership in the market place, and also our highly responsive, scalable operating model.

Kulicke and Soffa has recorded strong revenue and EPS growth, and it has strong earnings growth prospects. Considering KLIC's compelling valuation metrics, and the fact that the stock is in an uptrend, KLIC stock can move much higher.

Risks to the expected capital gain include a downturn in the U.S. economy, and weakness in the consumer electronics market.

Chart: finviz.com

Disclosure: I am long CSCD, KLIC. 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.