14 Large Cap Tech Stocks Undervalued By Levered Free Cash Flows

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 |  Includes: A, ACN, AMAT, ATVI, CA, CSCO, DELL, ERIC, HPQ, IP, MSI, NOK, NTT, ORAN, PCRFY, SYMC
by: Kapitall

Interested in finding stocks that may be trading below their fair value? If so, here are some ideas to get you started on your search.

We ran a screen on the tech sector for large cap stocks (with market caps above $10 billion) for those with the highest ratios of levered free cash flow/enterprise value, potentially indicating that they are undervalued.

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. Companies with high ratios of levered free cash flow/enterprise value may be undervalued by the market.

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.

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

List sorted by LFCF/EV.

1. Nokia Corporation (NYSE:NOK): Provides Internet and digital mapping and navigation services worldwide. Market cap of $21.50B. Levered free cash flow/enterprise value at 23.53% (levered free cash flow at $3.31B and enterprise value at $14.07B). The stock has had a couple of great days, gaining 5.65% over the last week.

2. Agilent Technologies Inc. (NYSE:A): Provides bio-analytical and electronic measurement solutions to the communications, electronics, life sciences, and chemical analysis industries in the United States and internationally. Market cap of $14.27B. Levered free cash flow/enterprise value at 17.81% (levered free cash flow at $2.24B and enterprise value at $12.58B). The stock has had a good month, gaining 23.38%.

3. Dell Inc. (NASDAQ:DELL): Provides integrated technology solutions in the information technology industry worldwide. Market cap of $29.95B. Levered free cash flow/enterprise value at 15.27% (levered free cash flow at $3.56B and enterprise value at $23.32B). The stock has had a good month, gaining 13.56%.

4. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic, and related industries worldwide. Market cap of $16.28B. Levered free cash flow/enterprise value at 14.44% (levered free cash flow at $1.60B and enterprise value at $11.08B). The stock has had a couple of great days, gaining 5.68% over the last week.

5. CA Technologies (NASDAQ:CA): Designs, develops, markets, delivers, licenses, and supports information technology management software products that operate on a range of hardware platforms and operating systems. Market cap of $11.18B. Levered free cash flow/enterprise value at 12.44% (levered free cash flow at $1.21B and enterprise value at $9.73B). The stock has had a good month, gaining 13.93%.

6. Symantec Corporation (NASDAQ:SYMC): Provides security, storage, and systems management solutions to secure and manage information. Market cap of $12.38B. Levered free cash flow/enterprise value at 12.41% (levered free cash flow at $1.46B and enterprise value at $11.76B). The stock has lost 5.73% over the last year.

7. Motorola Solutions, Inc. (NYSE:MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $15.49B. Levered free cash flow/enterprise value at 12.09% (levered free cash flow at $1.35B and enterprise value at $11.17B). The stock has gained 29.78% over the last year.

8. Accenture plc (NYSE:ACN): Operates as a management consulting, technology services, and outsourcing company. Market cap of $39.44B. Levered free cash flow/enterprise value at 11.58% (levered free cash flow at $3.42B and enterprise value at $29.53B). The stock has gained 11.33% over the last year.

9. Activision Blizzard, Inc. (NASDAQ:ATVI): Publishes online, personal computer (PC), console, handheld, and mobile games of interactive entertainment worldwide. Market cap of $13.98B. Levered free cash flow/enterprise value at 11.46% (levered free cash flow at $1.24B and enterprise value at $10.82B). The stock has gained 7.48% over the last year.

10. Hewlett-Packard Company (NYSE:HPQ): Offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap of $55.81B. Levered free cash flow/enterprise value at 11.44% (levered free cash flow at $8.59B and enterprise value at $75.06B). The stock has had a good month, gaining 11.94%.

11. France Telecom (FTE): Provides fixed telephony and mobile telecommunications, data transmission, Internet and multimedia, and other value-added services to consumers, businesses, and telecommunications operators. Market cap of $39.58B. Levered free cash flow/enterprise value at 11.02% (levered free cash flow at $8.91B and enterprise value at $80.87B). The stock has lost 22.35% over the last year.

12. Cisco Systems, Inc. (NASDAQ:CSCO): Designs, manufactures, and sells Internet protocol (NYSE:IP)-based networking and other products related to the communications and information technology industry worldwide. Market cap of $107.09B. Levered free cash flow/enterprise value at 10.99% (levered free cash flow at $8.38B and enterprise value at $76.27B). The stock has had a good month, gaining 12.99%.

13. LM Ericsson Telephone Co. (NASDAQ:ERIC): Provides communications equipment, professional services, and multimedia solutions to mobile and fixed networks operators worldwide. Market cap of $33.45B. Levered free cash flow/enterprise value at 10.63% (levered free cash flow at $2.55B and enterprise value at $23.99B). Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.61%, current ratio at 1.93, and quick ratio at 1.56. The stock has lost 8.26% over the last year.

14. Nippon Telegraph & Telephone Corp. (NYSE:NTT): Provides telecommunications services to residential and business customers in Japan. Market cap of $65.68B. Levered free cash flow/enterprise value at 10.04% (levered free cash flow at $10.35B and enterprise value at $103.12B). The stock has gained 9.82% over the last year.

*LFCF/EV data sourced from 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.