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When a company’s P/E ratio has fallen over time, while earnings steadily rise, it is a sign that price has not proportionately increased with earnings. In other words, the earnings may not be fully priced into the stock, and the stock may be undervalued.

We used this idea to screen for potentially undervalued stocks among the tech universe, looking for those that have seen a falling P/E while EPS was rising. On top of this screen, we then searched for those stocks appearing undervalued to earnings growth, with PEG below 1.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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.

(Click chart for more detail)

Do you think these stocks are undervalued? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Siemens AG (SI): Telecom Services Industry. Market cap of $122.91B. PEG at 0.73. TTM P/E at 13.75 vs. 3-year average at 19.75. Last year diluted EPS at $6.36 vs. 2-year prior EPS at $3.66. The stock has gained 41.37% over the last year.

2. Research In Motion Limited (RIMM): Diversified Communication Services Industry. Market cap of $14.63B. PEG at 0.34. TTM P/E at 4.43 vs. 3-year average at 14.32. Last year diluted EPS at $6.34 vs. 2-year prior EPS at $4.31. The stock has lost 48.83% over the last year.

3. Marvell Technology Group Ltd. (MRVL): Semiconductor Industry. Market cap of $9.26B. PEG at 0.75. TTM P/E at 12.06 vs. 3-year average at 23.46. Last year diluted EPS at $1.34 vs. 2-year prior EPS at $0.54. The stock has lost 8.95% over the last year.

4. Novellus Systems, Inc. (NVLS): Semiconductor Equipment & Materials Industry. Market cap of $2.90B. PEG at 0.80. TTM P/E at 9.19 vs. 3-year average at 58.95. Last year diluted EPS at $2.79 vs. 2-year prior EPS at -$0.88. The stock has gained 19.77% over the last year.

5. Ingram Micro Inc. (IM): Computers Wholesale Industry. Market cap of $2.87B. PEG at 0.90. TTM P/E at 9.59 vs. 3-year average at 82.73. Last year diluted EPS at $1.94 vs. 2-year prior EPS at $1.22. The stock has gained 10.33% over the last year.

6. Aixtron SE (AIXG): Diversified Machinery Industry. Market cap of $2.80B. PEG at 0.15. TTM P/E at 10.44 vs. 3-year average at 23.90. Last year diluted EPS at $2.72 vs. 2-year prior EPS at $0.69. This is a risky stock that is significantly more volatile than the overall market (beta = 2.68). The stock is a short squeeze candidate, with a short float at 5.09% (equivalent to 16.69 days of average volume). The stock has performed poorly over the last month, losing 22.18%.

7. AVX Corp. (AVX): Diversified Electronics Industry. Market cap of $2.60B. PEG at 0.89. TTM P/E at 10.69 vs. 3-year average at 14.38. Last year diluted EPS at $1.43 vs. 2-year prior EPS at $0.84. The stock has had a couple of great days, gaining 9.05% over the last week.

8. Lender Processing Services, Inc. (LPS): Business Services Industry. Market cap of $1.75B. PEG at 0.65. TTM P/E at 6.50 vs. 3-year average at 11.56. Last year diluted EPS at $3.23 vs. 2-year prior EPS at $2.87. The stock has lost 40.14% over the last year.

9. Veeco Instruments Inc. (VECO): Semiconductor Equipment & Materials Industry. Market cap of $1.66B. PEG at 0.47. TTM P/E at 5.91 vs. 3-year average at 46.34. Last year diluted EPS at $6.13 vs. 2-year prior EPS at -$0.48. This is a risky stock that is significantly more volatile than the overall market (beta = 2.48). The stock is a short squeeze candidate, with a short float at 25.78% (equivalent to 7.27 days of average volume). The stock has performed poorly over the last month, losing 19.71%.

10. TriQuint Semiconductor, Inc. (TQNT): Semiconductor Circuits Industry. Market cap of $1.63B. PEG at 0.58. TTM P/E at 8.62 vs. 3-year average at 22.33. Last year diluted EPS at $1.17 vs. 2-year prior EPS at $0.11. The stock has gained 42.39% over the last year.

11. Trina Solar Ltd. (TSL): Semiconductor Industry. Market cap of $1.32B. PEG at 0.28. TTM P/E at 4.61 vs. 3-year average at 9.38. Last year diluted EPS at $0.08 vs. 2-year prior EPS at $0.03. This is a risky stock that is significantly more volatile than the overall market (beta = 3.07). The stock has lost 21.21% over the last year.

12. TTM Technologies Inc. (TTMI): Printed Circuit Boards Industry. Market cap of $1.25B. PEG at 0.67. TTM P/E at 13.25 vs. 3-year average at 437.20. Last year diluted EPS at $1.01 vs. 2-year prior EPS at $0.11. The stock is a short squeeze candidate, with a short float at 9.52% (equivalent to 5.42 days of average volume). The stock has gained 53.79% over the last year.

13. Cirrus Logic Inc. (CRUS): Semiconductor Industry. Market cap of $1.04B. PEG at 0.28. TTM P/E at 5.65 vs. 3-year average at 16.47. Last year diluted EPS at $2.82 vs. 2-year prior EPS at $0.59. The stock has had a good month, gaining 10.56%.

14. JA Solar Holdings Co., Ltd. (JASO): Semiconductor Industry. Market cap of $812.25M. PEG at 0.31. TTM P/E at 2.81 vs. 3-year average at 22.17. Last year diluted EPS at $1.66 vs. 2-year prior EPS at -$0.12. This is a risky stock that is significantly more volatile than the overall market (beta = 2.98). The stock has lost 25.2% over the last year.

15. Mercury Computer Systems, Inc. (MRCY): Computer Peripherals Industry. Market cap of $530.26M. PEG at 0.99. TTM P/E at 13.06 vs. 3-year average at 19.61. Last year diluted EPS at $1.22 vs. 2-year prior EPS at $0.35. The stock has gained 41.58% over the last year.

16. Hanwha SolarOne, Ltd. (HSOL): Semiconductor Industry. Market cap of $458.37M. PEG at 0.15. TTM P/E at 3.44 vs. 3-year average at 89.02. Last year diluted EPS at $0.37 vs. 2-year prior EPS at -$0.08. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock has lost 44.23% over the last year.

17. Canadian Solar Inc. (CSIQ): Semiconductor Industry. Market cap of $402.0M. PEG at 0.33. TTM P/E at 7.34 vs. 3-year average at 38.21. Last year diluted EPS at $1.16 vs. 2-year prior EPS at $0.60. This is a risky stock that is significantly more volatile than the overall market (beta = 3.26). The stock is a short squeeze candidate, with a short float at 18.75% (equivalent to 5.81 days of average volume). The stock has lost 32.49% over the last year.

18. Xyratex Ltd. (XRTX): Data Storage Devices Industry. Market cap of $305.83M. PEG at 0.54. TTM P/E at 4.57 vs. 3-year average at 14.02. Last year diluted EPS at $4.46 vs. 2-year prior EPS at -$0.56. The stock is a short squeeze candidate, with a short float at 7.01% (equivalent to 6.02 days of average volume). The stock has lost 24.96% over the last year.

*P/E and EPS data sourced from Screener.co, all other data sourced from Finviz.

Source: 18 Undervalued Tech Stocks With Falling P/E and Rising EPS