Seeking Alpha
, Small Cap Gems (1,064 clicks)
Long only, contrarian, special situations, value
Profile| Send Message|
( followers)  

Apologies for a Christmas reference when we are still in October. However, it seemed appropriate to highlight a cheap cash rich tech stock named Rudolph Technologies (NYSE:RTEC). Not only does it have a fortress balance sheet but it is posting double digit revenue increases and selling at a low valuation.

Rudolph Technologies manufactures process control defect inspection, metrology, and process control software systems used by microelectronics device manufacturers.

7 reasons to buy RTEC at under $10 a share:

  1. The company has over $120mm in net cash on its balance sheet (approximately 40% of its current market capitalization)
  2. The median price target of the five analysts that cover the stock is $14 a share. Price targets range from $12 to $17 a share. Credit Suisse has an "outperform" rating and a $13.50 a share price target on RTEC.
  3. The company has doubled its operating cash flow over the past two years and the stock is priced at roughly nine times OCF.
  4. RTEC is selling at less than 10 times forward earnings, a deep discount to its five year average (24.6).
  5. The company is tracking to a 17% revenue increase in FY2012 and analysts expect just under a 10% sales increase in FY2013.
  6. Rudolph Technologies has crushed earnings estimates four of the last six quarters. The average beat over consensus during that time frame averaged over 30%.
  7. The stock has solid medium-term technical support at the $8.50 level (see chart below).

(click to enlarge)

Source: Santa's Favorite Cash Rich $10 Tech Stock