Do you appreciate a good value, even in the stock market? For a closer look at stocks that may hold solid value, we ran a screen.
We began by screening the tech sector for stocks that appear undervalued relative to earnings growth, with PEG below 1. We then screened these names for those that also appear undervalued relative to changes in EPS estimate over the last month.
Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred.
We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued. We also only included companies with greater than 5% increases in EPS estimates over the last month.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks are being underestimated by the market? Use this list as a starting point for your own analysis.
List sorted by increase in EPS estimate.
1. Hurco Companies Inc. (HURC): Engages in the design, manufacture, and sale of computerized machine tools, computer control systems, and software products to companies in the metal working industry primarily in North America, Europe, and Asia. Market cap at $175.49M. Price at $27.55. PEG at 0.83. The EPS estimate for the company's current year increased from 2.17 to 2.59 over the last 30 days, an increase of 19.35%. This increase came during a time when the stock price changed by -0.79% (from 26.72 to 26.51 over the last 30 days).
2. Telecom Argentina S A (TEO): Provides fixed-line telecommunication services and other related services in Argentina. Market cap at $2.91B. Price at $14.85. PEG at 0.54. The EPS estimate for the company's current year increased from 3.13 to 3.38 over the last 30 days, an increase of 7.99%. This increase came during a time when the stock price changed by -11.09% (from 18.93 to 16.83 over the last 30 days).
3. Rubicon Technology, Inc. (RBCN): Develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes, radio frequency integrated circuits, blue laser diodes, optoelectronics, and other optical applications. Market cap at $218.32M. Price at $9.87. PEG at 0.4. The EPS estimate for the company's current year increased from 0.19 to 0.2 over the last 30 days, an increase of 5.26%. This increase came during a time when the stock price changed by -7.51% (from 10.79 to 9.98 over the last 30 days).
*EPS 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.