6 Tech Stocks Near Highs Undervalued By EPS Trends

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 |  Includes: ASML, ELNK, KBAL, RDWR, TSM, TWTC
by: Kapitall

Do you consider yourself a value investor, always looking for underestimated and potentially undervalued stocks? For ideas on how to start your own value search, we ran a screen.

We began by screening the tech sector for stocks with strong upward momentum, trading within 5% of their 52-week highs.

We then screened for those that appear undervalued relative to their EPS trends 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.

Interactive Chart: Press Play to compare changes in market cap over the last two years for six of the 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 will break through to new highs? Use this list as a starting point for your own analysis.

List sorted by increase in EPS estimate over the last month.

1. Kimball International, Inc. (KBALB): Manufactures and sells electronic assemblies and furniture in the United States and internationally. Market cap at $257.34M, most recent closing price at $6.83. The stock is trading 4.03% below its 52-week high. The EPS estimate for the company's current year increased from 0.16 to 0.21 over the last 30 days, an increase of 31.25%. This increase came during a time when the stock price changed by 3.82% (from 6.54 to 6.79 over the last 30 days).

2. EarthLink Inc. (NASDAQ:ELNK): Provides communications services to individual and business customers in the United States. Market cap at $879.34M, most recent closing price at $8.25. The stock is trading 0.85% below its 52-week high. The EPS estimate for the company's current year increased from 0.1 to 0.12 over the last 30 days, an increase of 20%. This increase came during a time when the stock price changed by 6.56% (from 7.77 to 8.28 over the last 30 days).

3. TW Telecom Inc. (NASDAQ:TWTC): Provides managed network services to enterprise organizations and communication services companies in the United States. Market cap at $3.45B, most recent closing price at $22.78. The stock is trading 4.25% below its 52-week high. The EPS estimate for the company's current year increased from 0.52 to 0.57 over the last 30 days, an increase of 9.62%. This increase came during a time when the stock price changed by 5.13% (from 21.83 to 22.95 over the last 30 days).

4. Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM): Engages in the computer-aided designing, manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices; and manufacturing masks. Market cap at $80.04B, most recent closing price at $15.40. The stock is trading 4.37% below its 52-week high. The EPS estimate for the company's current year increased from 0.96 to 1.05 over the last 30 days, an increase of 9.38%. This increase came during a time when the stock price changed by 3.9% (from 14.86 to 15.44 over the last 30 days).

5. ASML Holding NV (NASDAQ:ASML): Engages in designing, manufacturing, marketing, and servicing semiconductor processing equipment used in the fabrication of integrated circuits. Market cap at $20.4B, most recent closing price at $49.0. The stock is trading 4.61% below its 52-week high. The EPS estimate for the company's current year increased from 3.37 to 3.64 over the last 30 days, an increase of 8.01%. This increase came during a time when the stock price changed by 1.1% (from 48.07 to 48.6 over the last 30 days).

6. Radware Ltd. (NASDAQ:RDWR): Provides application delivery solutions and network security solutions to banks, insurance companies, manufacturing and retail, government agencies, media companies, and service providers worldwide. Market cap at $722.76M, most recent closing price at $37.74. The stock is trading 4.71% below its 52-week high. The EPS estimate for the company's current year increased from 1.66 to 1.76 over the last 30 days, an increase of 6.02%. This increase came during a time when the stock price changed by 3.69% (from 36.57 to 37.92 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.