Small-cap stocks tend to offer investors greater growth opportunities than large-cap alternatives, although this comes with its fair share of added risk. If we're talking only about tech stocks, it's even more so. One way for a company to thrive in the tech space is to invest in innovative solutions, make key acquisitions, or to invest back in R & D. All of this takes strong cash reserves. Today we focused on small cap tech companies with sizable amounts of cash, that are ready to use it on the right opportunities. We looked for what we think are discounted stocks, by focusing on only those that are currently priced close to their 52-week low. We came up with a long and diverse list of some really interesting companies.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
We first looked for small cap technology stocks. We then looked for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We then looked for companies that are currently trading at no more than 10% above their 52-week lows.
Do you think these small-cap stocks are undervalued? Use our list along with your own analysis.
1) IXYS Corp. (IXYS)
|Industry:||Semiconductor - Specialized|
IXYS Corp. has a Current Ratio of 6.07, a Quick Ratio of 3.97, and trading above it's 52 Week Low by 6.80%. The short interest was 3.55% as of 06/15/2012. IXYS Corporation, an integrated semiconductor company, engages in the development, manufacture, and marketing of power semiconductors, advanced mixed signal integrated circuits (ICS), application specific integrated circuits (ASICs), microcontrollers, and systems and radio frequency semiconductors. It offers power metal oxide silicon field effect transistors; insulated gate bipolar transistors; and thyristors and rectifiers, including fast recovery epitaxial diodes. The company's power semiconductors are used primarily in controlling energy in motor drives; power conversion systems, including switch-mode and uninterruptible power supplies; medical electronics; and renewable energy sources. It also provides ICs, such as solid state relays for telecommunications applications; power management and control ICs comprising current regulators, motion controllers, digital power modulators, and drivers; microcontrollers, including embedded flash microcontrollers, core 8-bit microcontrollers, and microprocessors; and line card access switch and data access arrangement integrated products.
2) Acme Packet, Inc. (APKT)
Acme Packet, Inc. has a Current Ratio of 8.39, a Quick Ratio of 8.19, and trading above it's 52 Week Low by 0.63%. The short interest was 15.49% as of 06/15/2012. Acme Packet, Inc. provides session delivery network solutions that enable the delivery of voice, video, data, and unified communications services and applications across Internet protocol (IP) networks. Its Net-Net product family consists of session border controllers that control session delivery across defined border points; session managers, which manage user access and interface application servers; multiservice security gateways for securing session delivery of data and voice services over untrusted Internet and wireless fidelity access networks; and diameter signaling controllers. The company's Net-Net products also comprise session-aware load balancers that scales border control for SBC, MSG, and DSC deployments; session routing proxies that route sessions to/from access and interconnect borders; application session controllers for enabling server applications to initiate and control sessions; and session recorders, a complete software-based IP session recording solution, which performs session recording for the session delivery network.
3) Hittite Microwave Corporation (HITT)
|Industry:||Semiconductor - Integrated Circuits|
Hittite Microwave Corporation has a Current Ratio of 16.98, a Quick Ratio of 15.13, and trading above it's 52 Week Low by 8.56%. The short interest was 6.49% as of 06/15/2012. Hittite Microwave Corporation designs, develops, and sells integrated circuits , modules, subsystems, and instrumentation products for radio frequency (RF) microwave and millimeterwave applications worldwide. The company's IC products include amplifiers, digital and voltage variable attenuators, broadband time delays, automatic gain control products, clocks and timing products, comparators, cross point switches, data converters, direct current power conditioning and power management products, dielectric resonator oscillators, frequency dividers and detectors, frequency multipliers, digital logic products, intermediate frequency signal processing products, interface, and limiting amplifiers. Its IC products also comprise mixers and converters, modulators and demodulators, multiplexers/demultiplexers, optical modulator drivers, passives, phase lock loops, phase lock loops with integrated voltage controlled oscillators, phase shifters, power detectors, sensors, switches, Successive detection logarithmic video amplifiers, transimpedance amplifiers, tunable filters, variable gain amplifiers, and voltage controlled and phase locked oscillators.
4) Lattice Semiconductor Corporation (LSCC)
|Industry:||Semiconductor - Specialized|
Lattice Semiconductor Corporation has a Current Ratio of 5.60, a Quick Ratio of 4.93, and trading above it's 52 Week Low by 4.05%. The short interest was 4.90% as of 06/15/2012. Lattice Semiconductor Corporation designs, develops, manufactures, and markets programmable logic products and related software. The company offers field programmable gate array (FPGA) products, including LatticeECP products for deployment in wireless infrastructure and wireline access equipment, as well as in video and imaging applications; and LatticeXP products for the security, surveillance, and display markets. It also provides programmable logic device (PLD) products comprising ispMACH4000 in-system programmable complex programmable logic device family for handheld and portable equipment; MachXO family that is designed for various low density applications; Lattice iCE PLD devices that enable mobile device designers to add features to their mobile platform in areas the of connectivity, memory/storage, sensor management, and video/imaging; platform manager, power manager, and ispClock programmable mixed signal devices for system designers to integrate power or clock management functions within a single integrated circuit; and software development tools and intellectual property cores.
5) Micrel Inc. (MCRL)
|Industry:||Semiconductor - Integrated Circuits|
Micrel Inc. has a Current Ratio of 4.26, a Quick Ratio of 3.59, and trading above it's 52 Week Low by 8.98%. The short interest was 4.85% as of 06/15/2012. Micrel, Incorporated, doing business as Micrel Semiconductor, engages in the design, development, manufacture, and marketing of analog power, mixed-signal, and digital integrated circuits primarily in North America, Europe, and Asia. It offers power conversion products, including LDOs, DC/DC converters, analog power switches, PMIC devices, RF PA bias products, solid state lighting products, and FET drivers; supervisory and reference products; and general linear parts, such as op amps, thermal measurement devices, timers, and other general devices. The company also offers power analog circuits for notebook computers, tablet PCs, and smart phones; and radio frequency data communications products, including QwikRadio family of RF receivers and transmitters for use in garage door openers, lighting and fan controls, automotive keyless entry, and remote controls, as well as RadioWire transceivers for applications, such as remote metering, security systems, and factory automation. In addition, it develops and produces timing, clock management, high speed physical media devices, and interface integrated circuits for communications products targeted at fiber optic modules, active cables, backplane management, and data and clock management applications; and offers Ethernet products, including physical layer transceivers, media access controllers, switches, and system-on-chip devices for use in the digital home, enterprise, industrial, and automotive markets.
6) Finisar Corp. (FNSR)
|Industry:||Networking & Communication Devices|
Finisar Corp. has a Current Ratio of 4.26, a Quick Ratio of 2.81, and trading above it's 52 Week Low by 4.98%. The short interest was 15.80% as of 06/15/2012. Finisar Corporation designs, develops, manufactures, and markets optical subsystems and components that are used to interconnect equipment in short-distance local area networks (LANs), storage area networks (SANs), longer distance metropolitan area networks (MANs), fiber-to-the-home networks, cable television networks, and wide area networks. Its optical subsystems primarily include transmitters, receivers, transceivers, and transponders. The company's optical subsystems provides the fundamental optical-electrical interface for connecting the equipment used in building networks comprising switches, routers, and file servers in wireline networks, as well as antennas and base stations for wireless networks. It also offers products for switching network traffic from one optical wavelength to another across multiple wavelengths, known as reconfigurable optical add/drop multiplexers.
7) NII Holdings Inc. (NIHD)
NII Holdings Inc. has a Current Ratio of 2.19, a Quick Ratio of 2.04, and trading above it's 52 Week Low by 8.57%. The short interest was 12.51% as of 06/15/2012. NII Holdings, Inc., through its subsidiaries, provides wireless communication services under the Nextel brand name to businesses and individuals in Mexico, Brazil, Argentina, Peru, and Chile. Its services include mobile telephone service; Nextel Direct Connect service, which allows subscribers to talk to each other on a push-to-talk basis for private one-to-one calls or on group calls. The company also provides value-added services, including text messaging services; mobile Internet services; e-mail services; location-based services, such as the use of global positioning system technologies; digital media services; and a set of applications available via its content management system and the Android open application market.
8) Mercury Computer Systems, Inc. (MRCY)
Mercury Computer Systems, Inc. has a Current Ratio of 5.37, a Quick Ratio of 4.78, and trading above it's 52 Week Low by 7.21%. The short interest was 2.87% as of 06/15/2012. Mercury Computer Systems, Inc. designs, manufactures, and markets high-performance embedded, real-time digital signal and image processing systems and software for specialized defense and commercial computing markets. The company operates in two segments, Advanced Computing Solutions (ACS) and Mercury Federal Systems (MFS). The ACS segment provides high-performance computing solutions, such as single board computers, digital signal processors, and integrated subsystems to the aerospace and defense, semiconductor, and commercial computing markets.
9) Harmonic Inc. (HLIT)
Harmonic Inc. has a Current Ratio of 3.68, a Quick Ratio of 3.07, and trading above it's 52 Week Low by 8.57%. The short interest was 2.86% as of 06/15/2012. Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions to create, prepare, and deliver a range of video services for television and media platforms in the united States and internationally. Its products include video production platforms and playout solutions, such as video servers used by broadcasters, content owners, and multi-channel network operators to create and play-to-air television channels; video-optimized storage, which provides storage capacity and access bandwidth to support media production applications comprising video editing, content transformation, and media library management; and media applications that provide media integrated management and workflow control over content stored on its systems. The company offers video processing products, including broadcast encoders; contribution and distribution encoders; stream processing and statistical multiplexing solutions; content preparation and delivery for multi-screen applications; decoders and descramblers; and management and control software.
10) EXFO Inc (EXFO)
EXFO Inc has a Current Ratio of 4.10, a Quick Ratio of 3.08, and trading above it's 52 Week Low by 9.27%. The short interest was 0.12% as of 06/15/2012. EXFO Electro-Optical Engineering Inc. designs, manufactures, and markets test and service assurance solutions for network service providers (NSPs) and equipment manufacturers in the telecommunications industry worldwide. The company's Telecom division principally offers AXS-200 SharpTESTER, a multi-service, multi-medium handheld test platform for characterizing and troubleshooting commercial and residential access networks; FTB-200 Compact Platform, a two-slot portable test unit for multi-technology, multi-application characterization of metro and access networks; FTB-500 that provides NSPs with a way to perform multiple, advanced test operations for installation, maintenance, and troubleshooting applications; and IQS-600 platform for manufacturing, and research and development applications.
11) Polycom, Inc. (PLCM)
|Industry:||Processing Systems & Products|
Polycom, Inc. has a Current Ratio of 2.86, a Quick Ratio of 2.51, and trading above it's 52 Week Low by 5.15%. The short interest was 5.78% as of 06/15/2012. Polycom, Inc. provides communications equipment that enables businesses, telecommunications service providers, governmental and educational institutions, and healthcare customers to conduct video, voice, data, and Web communications. The company offers network infrastructure, including conferencing infrastructure, distributed media applications, management applications, recording and streaming security, and remote access for universal video collaboration; unified communications (UC) group systems, which include immersive telepresence, group video, and group voice systems that enable geographically dispersed individuals to communicate; UC personal devices comprising desktop video devices, desktop voice, and wireless local area network products that extend HD voice, video, and content to desktops, home offices, mobile users, and branch sites. It also provides various services, including assessments, implementation services, network consulting services, usage and adoption services, wireless services application integration, and advanced project management services.
12) Orbotech Ltd. (ORBK)
Orbotech Ltd. has a Current Ratio of 4.27, a Quick Ratio of 3.55, and trading above it's 52 Week Low by 2.35%. The short interest was 0.35% as of 06/15/2012. Orbotech Ltd. engages in designing, developing, manufacturing, marketing, and servicing yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. The company's products include automated optical inspection (AOI), automated optical repair, laser direct imaging, digital legend printing, laser drilling, laser plotters, computer-aided manufacturing, and engineering solutions for printed circuit boards (PCBS) and other electronics component manufacturing; and AOI, test, repair, and process monitoring systems for flat panel display (FPD) manufacturing. It also develops and markets character recognition solutions and services primarily to banks, financial institutions, and other payment processing institutions for use in check and healthcare payment processing.
13) AVX Corp. (AVX)
AVX Corp. has a Current Ratio of 5.81, a Quick Ratio of 3.91, and trading above it's 52 Week Low by 1.53%. The short interest was 1.15% as of 06/15/2012. AVX Corporation, together with its subsidiaries, manufactures and supplies various passive electronic components and related products for use in electronic devices to store, filter, or regulate electric energy. The company operates through three segments: Passive Components, KED Resale, and Interconnect. The Passive Components segment offers surface mount and leaded ceramic capacitors, RF thick and thin film components, tantalum capacitors, film capacitors, ceramic and film power capacitors, super capacitors, EMI filters, thick and thin film packages, varistors, thermistors, inductors, and resistive products. The KED Resale segment distributes and sells ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices, and connectors manufactured by Kyocera.
14) Cabot Microelectronics Corp. (CCMP)
|Industry:||Semiconductor - Integrated Circuits|
Cabot Microelectronics Corp. has a Current Ratio of 6.30, a Quick Ratio of 5.02, and trading above it's 52 Week Low by 2.31%. The short interest was 8.73% as of 06/15/2012. Cabot Microelectronics Corporation engages in the development, manufacture, and sale of chemical mechanical planarization (CMP) consumables to the semiconductor industry primarily in the United States, Asia, and Europe. CMP is a polishing process used by integrated circuit (IC) device manufacturers to planarize or flatten the multiple layers of material that are deposited upon silicon wafers in the production of advanced ICs. The company offers CMP slurries, which are liquid solutions composed of high-purity deionized water, proprietary chemical additives, and engineered abrasives that chemically and mechanically interact with the surface material of the IC device at an atomic level; and CMP polishing pads that are engineered polymeric materials designed to distribute and transport the slurry to the surface of the wafer and distribute it evenly across the wafer. Its CMP slurries are used for various polishing applications, including materials that conduct electrical signals, such as tungsten, copper, tantalum, and aluminum; the dielectric insulating materials that separate conductive layers within logic and memory IC devices; and the disk substrates and magnetic heads used in hard disk drives.
15) Intersil Corporation (ISIL)
|Industry:||Semiconductor - Broad Line|
Intersil Corporation has a Current Ratio of 3.80, a Quick Ratio of 3.22, and trading above it's 52 Week Low by 8.25%. The short interest was 3.19% as of 06/15/2012. Intersil Corporation designs, develops, manufactures, and markets analog and mixed-signal integrated circuits for applications in the industrial, computing, consumer, and communications electronics markets. The company's industrial products include operational amplifiers, bridge drivers, isolated and non-isolated power management products, switches and multiplexers, video decoders, and other standard analog and power management products used in medical imaging, energy management, automotive, military, instrumentation, security surveillance, and factory automation markets. Its computing products comprise desktop, server, notebook, and network attached storage power management products, including core power devices and other power management products for peripheral devices, as well as lithium ion battery chargers.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.