Today, I am going to analyze five undervalued technology stocks to consider as a buy in this delicate economic environment. A few have always been lucrative companies while others have become very attractive due to market volatility:
Xerox Corporation (XRX) – XRX stock is traded around $7.5 now. The stock has traded in a 52-week range between $6.55 and $12.08. XRX stock has price-to-earnings ratio of 10.69 and a forward price-to-earnings ratio of 6.09, meaning there’s an opportunity for multiple expansion for the stock. Earnings-per-share for the stock is $0.70. Price-earnings-to-growth ratio is 0.31, demonstrating a lower value than it should be. Shares could maintain a PEG closer to 1.
Its financial reports in the recent year show that XRX is among the fastest growing technology companies. Currently, quarterly earnings growth for XRX is 40.50%. Additionally, its profit margin and return on equity are 4.54% and 8.35%, respectively. As a rational investor, I rate this stock a buy. Luxor Capital Group is extremely bullish about XRX with a nearly $300 million position at the end of June.
Hewlett-Packard Company (HPQ) – HPQ stock price has moved upward a bit in October and now it is trading around $26. The stock has traded in a 52-week range between $21.50 and $49.39. Shares of HPQ stock hit a low of $22.20 last week, which is near the lowest for the year.
The profit margin of the company is 7.30%. HPQ stock has price-to-earnings ratio of 6.08 and a forward price-to-earnings ratio of 5.45, which is among the lowest in the technology industry. Earnings-per-share for the stock is $4.26. Price-earnings-to-growth ratio is 0.70, demonstrating a lower value than it should be. Shares could maintain a PEG closer to 1. John Paulson has more than 855 million in HPQ. It’s an attractive stock. I rate it a buy.
Corning Incorporated (GLW) – GLW stock is trading around $14 now. The stock has traded in a 52-week range between $11.51 and $23.43. The profit margin of the company is 45.68%. GLW stock has price-to-earnings ratio of 6.50 and a forward price-to-earnings ratio of 6.95. Earnings-per-share for the stock is $2.11. Again, price-earnings-to-growth ratio is 0.69, demonstrating a lower value than it should be. I strongly recommend GLW stock as a buy and hold, especially for long-term investors.
Intel Corporation (INTC) – INTC’s stock price has been in an upward trend since 2009. Now, the stock is being trading around $23. Also, the stock has traded in a 52-week range between $18.90 and $23.96. The profit margin of the company is 25.29%. INTC stock has price-to-earnings ratio of 10.55 and a forward price-to-earnings ratio of 9.38. Earnings-per-share for the stock is $2.18. Price-earnings-to-growth ratio is 0.88, demonstrating a lower value than it should be. On a relative value basis, however, INTC remains a solid buy.
Oracle Corporation (ORCL) – ORCL stock price has an upward trend after mid August and now it is traded around $31. The stock has traded in a 52-week range between $24.72 and $36.50. As the price of ORCL stock started to fall sharply in early August, some investors said that the company will collapse. But the real scenario is a bit different. The stock is now regaining its value. The profit margin of the company is 24.76%. ORCL stock has price-to-earnings ratio of 17.59 and a forward price-to-earnings ratio of 11.67, meaning there’s an opportunity for multiple expansion for the stock. Earnings-per-share for the stock is $1.76. Although its price-to-earnings ratio looks relatively high when compared with Cisco’s (CSCO) 14.52, its price-earnings-to-growth ratio of 0.95 demonstrates relative value when compared with CSCO stock’s ratio of 1.09. The company’s price-earnings-to-growth ratio is a more relevant metric when concluding that this is an attractive stock. I rate it a buy.
