Investors who are intrigued by the tech industry but concerned about risk may find what they are looking for by narrowing in on large cap companies. That is especially true when those companies have strong growth forecasts for the coming year, and minimal debt. After all, when a company has manageable debt ratios, it demonstrates that it has achieved its size without relying on debt for funding. As a result, it has the freedom to focus its full attention on growth. For our list today, we have found three large cap tech stocks that have kept debt to a minimum and are set for expansion. We think you will find our list worthy of further review.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio. This value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.
We first looked for large cap technology stocks. From here, we then looked for companies that have high future earnings per share growth forecasts (1-year projected EPS Growth Rate>25%). We next screened for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio<.1).
Do you think the valuations of these large cap stocks are too low, given their fundamentals? Please use our list to assist with your own analysis.
1) Kyocera Corp. (NYSE:KYO)
|1-Year Projected Earnings Per Share Growth Rate||27.33%|
|Long Term Debt/Equity Ratio||0.01|
Kyocera Corporation manufactures, distributes, and sells industrial components and telecommunications and information equipment worldwide. The company offers fine ceramic components for semiconductor processing and LCD manufacturing equipment; information and telecommunication, automotive, and general industrial ceramic components; and sapphire substrates, as well as ceramic packages for crystal and SAW devices; CMOS/CCD image sensors and LSI ceramic packages; wireless communication and optical communication device packages and components; and organic multilayer packages and substrates. The company was formerly known as Kyoto Ceramic Kabushiki Kaisha and changed its name to Kyocera Corporation in 1982. Kyocera Corporation was founded in 1959 and is headquartered in Kyoto, Japan.
2) LinkedIn Corporation (LNKD)
|Industry||Internet Information Providers|
|1-Year Projected Earnings Per Share Growth Rate||110.00%|
|Long Term Debt/Equity Ratio||0.00|
LinkedIn Corporation operates an online professional network. Through its proprietary platform, the company allows members to create, manage, and share their professional identity online; build and engage with their professional networks; access shared knowledge and insights; and find business opportunities. Its platform also offers members solutions, including applications and tools to search, connect, and communicate with business contacts, learn about career opportunities, join industry groups, research organizations, and share information. LinkedIn Corporation was founded in 2002 and is headquartered in Mountain View, California.
3) Salesforce.com, Inc. (NYSE:CRM)
|1-Year Projected Earnings Per Share Growth Rate||32.67%|
|Long Term Debt/Equity Ratio||0.00|
Salesforce.com, Inc. provides cloud computing and social enterprise solutions to various businesses and industries worldwide. The company delivers customer relationship management applications through Internet or cloud. Salesforce.com, Inc. was founded in 1999 and is based in San Francisco, California.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 10/12/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.