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In the search for potentially undervalued stocks, we ran a screen based on the theoretical assumption that if P/E is equal to a constant K, growth in EPS estimates should be matched by proportionate growth in price. When they don’t match up, a mispricing may have occurred.

We screened stocks from the tech sector for those exhibiting this trend.

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. To access a complete analysis of this list's recent performance, click here.

click on image to enlarge

Do you think the market is undervaluing these companies’ earnings? Use this list as a starting-off point for your own analysis.

List sorted by market cap:

  1. Apple Inc. (NASDAQ:AAPL): Personal computers industry. Market cap of $361.56 billion. Over the last 30 days, analyst projected EPS has increased 0.26% (from $27.34 to $27.41), while the price has decreased 1.70% (from $396.75 to $389.99). Might be undervalued at current levels, with a PEG ratio at 0.74, and P/FCF ratio at 12.43. The stock has gained 60.42% over the last year.
  2. Dell Inc. (NASDAQ:DELL): Personal computers industry. Market cap of $27.11 billion. Over the last 30 days, analyst projected EPS has increased 4.71% (from $1.91 to $2.00), while the price has decreased 8.50% (from $16.24 to $14.86). Might be undervalued at current levels, with a PEG ratio at 0.94, and P/FCF ratio at 5.79. The stock has gained 26.25% over the last year.
  3. Equinix, Inc. (NASDAQ:EQIX): Telecom services industry. Market cap of $4.46 billion. Over the last 30 days, analyst projected EPS has increased 1.90% (from $2.10 to $2.14), while the price has decreased 9.06% (from $104.30 to $94.85). The stock is a short squeeze candidate, with a short float at 10.25% (equivalent to 6.54 days of average volume). The stock has had a couple of great days, gaining 7.71% over the last week.
  4. FactSet Research Systems Inc. (NYSE:FDS): Information and delivery services industry. Market cap of $4.02 billion. Over the last 30 days, analyst projected EPS has increased 0.55% (from $3.66 to $3.68), while the price has decreased 3.97% (from $91.43 to $87.80). The stock has had a couple of great days, gaining 5.76% over the last week.
  5. Cellcom Israel Ltd. (NYSE:CEL): Wireless communications industry. Market cap of $2.21 billion. Over the last 30 days, analyst projected EPS has increased 0.56% (from $10.67 to $10.73), while the price has decreased 15.20% (from $26.19 to $22.21). The stock has performed poorly over the last month, losing 15.2%.
  6. Perfect World Co., Ltd. (NASDAQ:PWRD): Multimedia and graphics software industry. Market cap of $1.08 billion. Over the last 30 days, analyst projected EPS has increased 16.41% (from $2.62 to $3.05), while the price has increased 10.77% (from $19.41 to $21.50). The stock has had a good month, gaining 10.77%.

*EPS and price data sourced from Yahoo Finance, all other data sourced from Finviz.

Source: 6 Tech Stocks Undervalued By EPS Trends