One important consideration for tech stocks is how easily the companies can pay their ongoing capital expenditures. Operating cash flow is a likely source for this payment, so the ratio of operating cash flow to capital expenditures can give an idea of whether the firm’s fixed asset expenses are reasonably covered, leaving cash to spare.
We ran a screen on technically oversold tech stocks (with RSI(14) below 40) for those that have high trailing-twelve-month operating cash flow relative to capital expenditures (ratios above 5).
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
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Do you think these stocks are being oversold? Use this list as a starting-off point for your own analysis.
List sorted by market cap.
1. NVIDIA Corporation (NASDAQ:NVDA): Semiconductor Industry. Market cap of $9.44B. RSI(14) at 34.33. TTM operating cash flow/capital expenditures at 7.62. The stock has performed poorly over the last month, losing 12.9%.
2. Veeco Instruments Inc. (NASDAQ:VECO): Semiconductor Equipment & Materials Industry. Market cap of $1.83B. RSI(14) at 36.11. TTM operating cash flow/capital expenditures at 11.89. This is a risky stock that is significantly more volatile than the overall market (beta = 2.47). The stock is a short squeeze candidate, with a short float at 24.62% (equivalent to 7.57 days of average volume). The stock has performed poorly over the last month, losing 14.75%.
3. NetScout Systems Inc. (NASDAQ:NTCT): Business Software & Services Industry. Market cap of $718.49M. RSI(14) at 26.37. TTM operating cash flow/capital expenditures at 7.75. The stock is currently stuck in a downtrend, trading 15.35% below its SMA20, 22.99% below its SMA50, and 28.41% below its SMA200. It's been a rough couple of days for the stock, losing 19.09% over the last week.
*Operating cash flow/capital expenditures data sourced from Screener.co, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.