It’s hard to find a good bargain in anything these days, but the technology sector seems to have more than its share of undervalued stocks. This makes the tech sector an attractive prospect for investors looking to get in cheap and come out with big profits. These stocks are constantly undervalued, which makes them ideal for savvy investors.
Intel (NASDAQ: INTC)
Intel has been in the business of designing, manufacturing, and selling microprocessors and other technological innovations since the 1960s. The company generates good cash flow, owes little debt, and consistently brings value to its shareholders. Now, as Intel breaks into the mobile market, it stands as an even stronger asset in the portfolio.
Cisco (NASDAQ: CSCO)
Cisco offers a range of networking solutions and is keeping up with the market by offering Internet solutions to go along with its other networking products. Since the second quarter of 2011, Cisco has increased its dividends by an astounding 183 percent. They have an excellent debt to equity ratio of .28 and a consistent history of managing their debt effectively. Now that Cisco is growing in the cloud computing sector, stocks are worth even more than investors are currently paying.
Corning (NYSE: GLW)
Corning makes glass and ceramic products used in the manufacturing of portable computers, fiber optic cables, and scientific research equipment. With an annual growth rate of 12 percent and a solid financial history, Corning is earning 6 percent higher revenues than the industry average. The company has paid off $600 million in debt since the end of fiscal year 2011, securing a debt to equity ratio of just .13.
Perhaps less recognizable than some other names on this list, Corning is undervalued and unnoticed: an excellent combination for the investor to capitalize on.
Hewlett-Packard (NYSE: HPQ)
When Hewlett-Packard announced plans to stop computer manufacturing to work on other “higher margin industries,” stock values plummeted. Though the CEO to blame has since been replaced and those plans were effectively squelched, investors never rewarded the company by returning their stock values to normalcy. With earnings growth of nearly 300 percent over the past decade, Hewlett-Packard is a solid, proven investment with nowhere to go but up in value.
Western Digital Corporation (NASDAQ: WDC)
Western Digital manufactures solid state drives (SSDs), which are on the cusp of becoming a real market changer for the computer industry. Though the drives are not yet cost-effective for the average consumer, history shows new technology eventually drops in price and takes off in the marketplace. The flood in Thailand hurt stock values of Western Digital, and the company faces tough competition in the market. But as the cost of SSDs drop, value of Western Digital stock is bound to rise.
ManTech International Corporation (NASDAQ: MANT)
Sequestration hurt the value of almost all U.S. defense contractors — ManTech not excluded. However, the products offered by ManTech are unlikely to be cut too severely even in the most severe of budget cuts, because ManTech specializes in cyber security and intelligence products, something we simply can’t afford to do without.
ManTech lost half their value immediately after sequestration went into effect, but their earnings remain level and the future looks excellent as the company is investing in solid acquisitions. Analysts predict ManTech stocks are undervalued by as much as 40 percent.
ComTech Telecommunications (NASDAQ: CMTL)
One key indicator that a stock is undervalued is when the company starts buying back its own stocks. This is what’s happening at ComTech, a designer, developer, and manufacturer of communications systems and services. They specialize in communications transmission products, microwave amplifiers, and mobile data communications products.
ComTech is buying back its own stock, prompting most analysts to conclude the stock is worth more than the asking price. It’s a solid investment opportunity if investors get in before the market prices catches up to true value.
Lam Research Corporation (NASDAQ: LRCX)
Lam Research Corp. produces wafer fabrication equipment and services to the semiconductor industry. This worldwide supplier acquired Novell in 2012, adding some significant strategic benefits to its offerings. Lam is now a supplier to our number one undervalued stock, Intel, and can offer a broader range of products. The acquisition of Novell also put it in a better position to compete with the likes of Applied Materials, ASML, and Aixtron.
Overall, technology remains a strong investment opportunity. But finding undervalued stocks such as these are a goldmine for investors looking to turn a profit quickly with relatively little risk.