Interested in technology stocks? Looking for undervalued stocks? Do you prefer companies with strong profits? For a closer look at stocks of this nature, we ran a screen.
The forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
We first looked for Technology stocks with a low price-multiple premium (forward P/E<10) and that have shown strong bottom line growth over the last year (1-year fiscal EPS growth rate>10%). We did not screen out any market caps.
Do you think these technology stocks will outperform? Please use our list to assist your own analysis.
1) Spansion Inc. (CODE)
|Industry:||Semiconductor- Memory Chips|
Spansion Inc. has a Forward Price/Equity Ratio of 6.56 and Earnings Per Share Growth of 238.98%. The short interest was 4.17% as of 04/25/2012. Spansion Inc. engages in the design, development, manufacture, and sale of flash memory semiconductors worldwide. It offers flash memory solutions for microprocessors, controllers, and other programmable semiconductors that run applications in a range of electronic systems, including automotive and industrial, computing and communications, and consumer and gaming. The company's product designs are primarily based on its proprietary two-bit-per-cell MirrorBit technology.
2) Comverse Technology Inc. (NASDAQ:CMVT)
Comverse Technology Inc. has a Forward Price/Equity Ratio of 9.91 and Earnings Per Share Growth of 52.31%. The short interest was 0.82% as of 04/25/2012. Comverse Technology, Inc., through its subsidiaries, provides software-based products, systems, and related services for wireless, wireline, and cable network communication service providers. It products offer converged, prepaid, and postpaid billing and active customer management systems; enable wireless, wireline, and cable network-based value-added services (VAS), such as voicemail, visual voicemail, call completion, short messaging service, text messaging, multimedia picture and video messaging, and Internet protocol communications; and provide wireless users with optimized access to Internet Websites, content and applications, manage and enforce policy, and generate data usage. The company also provides Actionable Intelligence solutions to capture, distill, and analyze complex and underused information sources, such as voice, video, and unstructured text, as well as maintenance and support, managed, and training services.
3) CSG International, Inc. (NASDAQ:CSGS)
|Industry:||Business Software & Services|
CSG International, Inc. has a Forward Price/Equity Ratio of 6.99 and Earnings Per Share Growth of 89.41%. The short interest was 3.94% as of 04/25/2012. CSG Systems International, Inc. provides business support solutions primarily to the communications industry. Its suite of solutions comprises Advanced Convergent Platform, a billing and customer care, and business optimization platform; Singleview suite, an integrated customer care, billing, and real-time rating and charging solution; Total Service Mediation (NYSE:TSM) framework supports offline, and real-time mediation requirements, as well as service activation; and Wholesale Business Management (WBM) solution, a wholesale settlement and routing solution that handles various types of traffic consisting of voice, data, and content. The company's solutions also include customer interaction management solutions that deliver interactive voice, SMS/text, print, email, Web, and fax messages on behalf of clients; analytics and intelligence services suite delivers an approach for enhancing the customer experience, increasing sales opportunities, and optimizing business; and Content Direct solutions, which enable content providers to manage subscriber preferences and offer digital content.
4) Authentidate Holding Corp. (NASDAQ:ADAT)
|Industry:||Healthcare Information Services|
Authentidate Holding Corp. has a Forward Price/Equity Ratio of 10.00 and Earnings Per Share Growth of 35.52%. The short interest was 2.24% as of 04/25/2012. Authentidate Holding Corp. provides secure Web-based software applications and telehealth products and services in the United States. It offers Inscrybe Healthcare, a Web-based health information exchange and workflow automation solution that enables healthcare industry participants to exchange and track a range of documents, certificates, authorizations, and other information over various modes of communication, including electronic and fax delivery; Inscrybe Office, a Web-based service to sign, seal, and confirm receipt of important documents; and AuthentiProof, a content integrity and time-and-date stamp application. The company also provides the in-home ExpressMD solution, which integrates Electronic House Call in-home patient vital signs monitoring system with a software interface based on the Inscrybe Healthcare platform.
5) Axcelis Technologies Inc. (NASDAQ:ACLS)
|Industry:||Semiconductor Equipment & Materials|
Axcelis Technologies Inc. has a Forward Price/Equity Ratio of 7.19 and Earnings Per Share Growth of 127.68%. The short interest was 2.51% as of 04/25/2012. Axcelis Technologies, Inc., together with its subsidiaries, designs, manufactures, and services ion implantation, dry strip, and other processing equipment used in the fabrication of semiconductor chips in the United States, Europe, and the Asia Pacific. It offers a line of high energy, high current, and medium current ion implanters for various applications, such as line of single wafer implanters, known as the Optima platform, comprising the Optima XE, the Optima HD, and the Optima MD. The company also offers dry strip tools, including the Integra RS, which comprises paired-chamber process modules.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.