Interested in technology stocks? Looking for undervalued stocks? Interested in companies with minimal debt? If yes, here are a few ideas to start your search.
The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a Price/Book Value Ratio of less than 1, it is stated to be trading below "break up" value. A lower P/BV Ratio can indicate a potentially mis-priced company or indicate that something is fundamentally wrong with it.
The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
We first looked for Technology stocks that are undervalued (P/BV<1) and that have maintained a sound capital structure (D/E Ratio<.3). We did not screen out any market caps.
Do you think these technology stocks will perform well? Use our list along with your own analysis.
1) Broadcom Corp. (BRCM)
|Industry:||Semiconductor - Integrated Circuits|
Broadcom Corp. has a Price/Book Value Ratio of 2.91 and Debt/Equity Ratio of 0.18. The short interest was 1.56% as of 04/22/2012. Broadcom Corporation designs and develops semiconductors for wired and wireless communications. It provides a portfolio of system-on-a-chip (SoC) and software solutions for the manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices, which enable the delivery of voice, video, data, and multimedia content to the home, office, and mobile environment.
The company's broadband communications products include cable modem SoCs; femtocell SoCs; MPEG/AVC/VC-1 encoders and transcoders; xDSL, passive optical network, and cable modem customer premises equipment and central office solutions; powerline networking SoCs; and digital cable, direct broadcast satellite, terrestrial, and Internet protocol (IP) set-top box integrated receiver demodulators. The company's mobile and wireless products comprise Wi-Fi and Bluetooth SoCs, wireless connectivity combo chips, global positioning system SoCs, multimedia processors, applications processors, power management units, VoIP SoCs, mobile TV SoCs, and near field communications tags.
2) Autodesk, Inc. (ADSK)
|Industry:||Technical & System Software|
Autodesk, Inc. has a Price/Book Value Ratio of 4.85 and Debt/Equity Ratio of 0.00. The short interest was 1.53% as of 04/22/2012. Autodesk, Inc. provides design software and services to customers worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a customizable and extensible computer-aided design (CAD) application for professional design, drafting, detailing, and visualization in fields ranging from construction to manufacturing, civil engineering, and process plant design; and AutoCAD LT, a professional drafting and detailing software that includes document sharing capability.
The company's Architecture, Engineering and Construction segment offers Autodesk Revit products, which provide model-based design and documentation system for architects, structural engineers, and design-build teams, as well as mechanical, electrical, and plumbing engineers; AutoCAD Civil 3D products, which provide a surveying, design, analysis, and documentation solution for civil engineering; AutoCAD Architecture software that includes architecture industry-specific tools to improve coordination; and AutoCAD Map 3D software, which provides direct access to data needed for infrastructure planning, design, and management activities.
3) CA Technologies (CA)
CA Technologies has a Price/Book Value Ratio of 2.23 and Debt/Equity Ratio of 0.23. The short interest was 3.45% as of 04/22/2012. CA Technologies, together with its subsidiaries, designs, develops, markets, delivers, licenses, and supports information technology (IT) management software products that operate on a range of hardware platforms and operating systems. It offers enterprise IT management software for organizations that addresses components of the computing environment, including people, information, processes, systems, networks, applications, and databases.
The company provides a portfolio of mainframe and distributed software products with a focus on mainframe, service assurance, security (identity and access management), project and portfolio management, service management, virtualization and service automation, and cloud computing.
4) Apple Inc. (AAPL)
Apple Inc. has a Price/Book Value Ratio of 5.93 and Debt/Equity Ratio of 0.00. The short interest was 1.04% as of 04/22/2012. Apple Inc., together with subsidiaries, designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players; and sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide.
The company's products and services include iPhone, iPad, Mac, iPod, Apple TV, the iOS and Mac OS X operating systems, iCloud, and various accessory and support offerings, as well as a range of consumer and professional software applications. The company sells its products and services to consumers, small and mid-sized business, education, enterprise, and government customers through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers.
5) Akamai Technologies, Inc. (AKAM)
|Industry:||Internet Information Providers|
Akamai Technologies, Inc. has a Price/Book Value Ratio of 3.08 and Debt/Equity Ratio of 0.00. The short interest was 2.94% as of 04/22/2012. Akamai Technologies, Inc. provides content delivery and cloud infrastructure services for accelerating and improving applications over the Internet in the United States and internationally.
The company offers application and cloud performance solutions to enhance the operation of the applications used by enterprises to connect with their employees, suppliers, and customers. Its solutions include Web Application Accelerator, which enables enterprises to run various applications; and IP Application Accelerator that is designed to optimize the performance, availability, and real-time sensitivity associated with IP-enabled applications delivered over Internet-related protocols.
* Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.