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One way to search for potentially undervalued stocks is by comparing current price to analyst target prices.

Of course, analyst prices tend to be inflated most of the time, so we ran a screen that used the most pessimistic analyst target price as the benchmark for our analysis.

In addition, we only focused on companies that have more than five analyst target prices (to make sure we only focus on companies that have decent analyst coverage).

We screened stocks from the tech sector rallying above their 20-day, 50-day and 200-day moving averages for those trading at significant discounts to even the most pessimistic analyst target prices, suggesting that these stocks may be undervalued.

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


Do you think these stocks will continue moving higher? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by target price.

1. Omnicell Inc. (NASDAQ:OMCL):
Offers automated solutions for hospital medication dispensing and supply management primarily in the United States and Canada. Market cap of $498.76M. The stock is currently trading at 3.12% above its 20-Day SMA, 2.09% above its 50-Day SMA, and 2.08% above its 200-Day SMA. Of the seven analysts that have set a target price on the stock, the lowest price target stands at $18.00. This implies a current upside of 21.38% from current levels around $14.83. The stock is a short squeeze candidate, with a short float at 5.84% (equivalent to 8.24 days of average volume). The stock has had a couple of great days, gaining 6.14% over the last week.

2. Actuate Corporation (NASDAQ:BIRT):
Provides software solutions and consulting services to corporate and government customers. Market cap of $60.33M. The stock is currently trading at 3.98% above its 20-Day SMA, 0.40% above its 50-Day SMA, and 6.97% above its 200-Day SMA. Of the five analysts that have set a target price on the stock, the lowest price target stands at $7.00. This implies a current upside of 19.45% from current levels around $5.86. The stock has had a couple of great days, gaining 7.21% over the last week.

3. ClickSoftware Technologies Ltd. (NASDAQ:CKSW):
Provides workforce and service management software products and solutions. Market cap of $289.45M. The stock is currently trading at 15.53% above its 20-Day SMA, 13.09% above its 50-Day SMA, and 8.37% above its 200-Day SMA. Of the five analysts that have set a target price on the stock, the lowest price target stands at $11.00. This implies a current upside of 19.31% from current levels around $9.22. The stock has had a good month, gaining 19.17%.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), 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.

Source: 3 Rallying Tech Stocks Undervalued By Target Price