Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

Interested in finding stocks that are trading below fair value? One idea is to use target price as a proxy for fair value. If stocks are trading deeply below their target prices, they may be undervalued.

To illustrate this idea, we ran a screen on the tech sector for stocks trading at the steepest discounts to even their most pessimistic (lowest) target prices.

To only include companies with sufficient coverage, we only screened for companies with 5 or more analyst target prices.

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 should be trading higher? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by target price.

1. Velti Plc (VELT): Provides mobile marketing and advertising solutions for mobile operators, ad agencies, brands, and media groups. Market cap of $548.25M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $12.00. This implies a current upside of 34.98% from current levels around $8.89. The stock is a short squeeze candidate, with a short float at 5.92% (equivalent to 5.57 days of average volume). The stock has had a couple of great days, gaining 10.85% over the last week.

2. ICG Group, Inc. (ICGE): A private equity and venture capital firm specializing in patient capital, growth capital, acquisitions, and mid and late venture investments in public and private companies. Market cap of $343.42M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $12.00. This implies a current upside of 30.86% from current levels around $9.17. The stock has had a couple of great days, gaining 7.63% over the last week.

3. Merge Healthcare Incorporated (MRGE): Provides health information technology interoperability solutions. Market cap of $494.13M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $7.00. This implies a current upside of 28.21% from current levels around $5.46. The stock is a short squeeze candidate, with a short float at 8.84% (equivalent to 6.01 days of average volume). The stock has had a couple of great days, gaining 13.04% over the last week.

4. The Active Network, Inc. (ACTV): Offers application services technology and marketing access to community service and participatory sports organizations.. Market cap of $774.83M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $18.00. This implies a current upside of 26.05% from current levels around $14.28.

5. Changyou.com Limited (CYOU): Develops and operates online games in the People's Republic of China. Market cap of $1.25B. Of the 18 analysts that have set a target price on the stock, the lowest price target stands at $29.00. This implies a current upside of 21.85% from current levels around $23.80. The stock has had a couple of great days, gaining 8.23% over the last week.

6. hiSoft Technology International Ltd. (HSFT): Provides outsourced information technology and research and development services in North America, Europe, and Asia. Market cap of $351.21M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $14.00. This implies a current upside of 21.74% from current levels around $11.50. The stock has had a couple of great days, gaining 10.47% over the last week.

7. OYO Geospace Corp. (OYOG): Engages in designing and manufacturing instruments and equipments used in the acquisition and processing of seismic data; and in the characterization and monitoring of producing oil and gas reservoirs. Market cap of $552.32M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $102.00. This implies a current upside of 17.27% from current levels around $86.98. The stock has had a couple of great days, gaining 5.04% over the last week.

8. Knology, Inc. (KNOL): Provides video, voice, data, and advanced communications services to residential and business customers in the southeastern and midwestern United States. Market cap of $550.71M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $17.00. This implies a current upside of 16.44% from current levels around $14.60. The stock has gained 1.88% over the last year.

9. Shutterfly, Inc. (SFLY): Provides an Internet-based social expression and personal publishing service that enables consumers to share, print, and preserve their memories through the medium of photography. Market cap of $804.0M. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $27.00. This implies a current upside of 16.43% from current levels around $23.19. The stock is a short squeeze candidate, with a short float at 24.48% (equivalent to 5.14 days of average volume). The stock has lost 30.05% over the last year.

10. Ariba Inc. (ARBA): Provides collaborative business commerce solutions for buying and selling goods and services. Market cap of $2.83B. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $33.00. This implies a current upside of 15.79% from current levels around $28.50. The stock has performed poorly over the last month, losing 10.91%.

11. CEVA Inc. (CEVA): Engages in designing and licensing silicon intellectual property for the handsets, portable multimedia, and consumer electronics markets. Market cap of $652.25M. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $32.00. This implies a current upside of 15.44% from current levels around $27.72. The stock is a short squeeze candidate, with a short float at 15.84% (equivalent to 15.14 days of average volume). The stock has gained 20.63% over the last year.

12. OPNET Technologies Inc. (OPNT): Provides software products and related services for managing applications and networks in the United States and internationally. Market cap of $766.47M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $39.25. This implies a current upside of 15.27% from current levels around $34.05. The stock is a short squeeze candidate, with a short float at 11.59% (equivalent to 5.05 days of average volume). The stock has performed poorly over the last month, losing 12.92%.

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

Source: 12 Tech Stocks Deeply Discounted From Target Price