In this article we will take a look at the top 5 undervalued tech stocks. For a detailed analysis of the technology industry, go directly to the Top 10 Undervalued Tech Stocks.
5. SunPower Corporation (NASDAQ: SPWR)
Number of Hedge Fund Holders: 24
SunPower Corporation (NASDAQ: SPWR) is a San Jose-based company that provides solar solutions. The company markets these solutions to a network of dealers who then sell them to residential, commercial and industrial clients. SunPower makes solar systems that can be mounted on roofs, carports, and backyards. The firm also provides maintenance for these systems. It has a market cap of $4.7 billion and posted an annual revenue of more than $1.1 billion in December 2020. It is ranked fifth on our list of top 10 undervalued tech stocks.
SunPower is expected to benefit from a proposed US government plan to extend tax credits for clean energy firms. President Biden has backed the extension of the tax credits and also promised to invest heavily in clean energy to tackle climate change. Back in March, the stock rating of SunPower was upgraded to Buy from Neutral by Goldman Sachs, one of he leading investment banks in the world. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in the firm with more than 4.5 million shares worth more than $123 million.
4. FinVolution Group (NYSE: FINV)
Number of Hedge Fund Holders: 8
FinVolution Group (NYSE: FINV) is a Shanghai-based financial services company. The firm operates as a platform connecting borrowers with finance institutions. The company provides loan products through the platform as well. It has more than 110 million registered users. The firm was founded in 2007 and is placed fourth on our list of top 10 undervalued tech stocks.
On March 11, the firm hiked the annual dividend by 42% to $0.17 per share from $0.12 per share. It has a price-to-earnings ratio of 5.29. In January this year, the firm announced that Shaofeng Gu, the chief of FinVolution, had purchased $0.53 million worth of additional shares in the firm and now owned almost a 30% stake in the company. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in the firm with 591,229 shares worth more than $1.5 million.
3. Zynga Inc. (NASDAQ: ZNGA)
Number of Hedge Fund Holders: 52
Zynga Inc. (NASDAQ: ZNGA) is a California-based social game developer. The company develops and sells games for mobile platforms such as Android and iOS, social networking platforms like Facebook and Snapchat, and personal computers or video game consoles. The games that the firm sells also provide businesses with advertising services. The company was founded in 2007 and is ranked third on our list of top 10 undervalued tech stocks. It has a market cap of $11.5 billion and posted an annual revenue of close to $2 billion in 2020.
On April 19, investment firm BMO Capital Markets started coverage on Zynga stock with an Outperform rating with a price target of $15. Gerrick Johnson, an analyst at the investment firm, said the stock was the best play in the mobile game market. Johnson also said that mobile games were the fastest growing segment of the video game industry.
At the end of the fourth quarter of 2020, 52 hedge funds in the database of Insider Monkey held stakes worth $1 billion in the firm, up from 48 in the preceding quarter worth $995 billion.
Artisan Small Cap Fund, in their Q4 2020 investor letter, mentioned Zynga Inc. (NASDAQ: ZNGA). Here is what Artisan Small Cap Fund has to say about Zynga Inc. in their Q4 2020 investor letter:
“We also added to our position in Zynga. Our multiyear investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
2. Jiayin Group Inc. (NASDAQ: JFIN)
Number of Hedge Fund Holders: 3
Jiayin Group Inc. (NASDAQ: JFIN) is a Shanghai-based online financial marketplace. The marketplace connects individual investors and individual borrowers in China. The firm manages the connections by offering a secure, open and transparent platform for fast business transactions. It was founded in 2011. The company has a market cap of more than $300 million and posted more than $200 million in annual revenue in December 2020.
On March 22, the stock of the firm jumped 36% after posts on social media by financial advisors claimed that the firm was undervalued. On April 5, the firm announced that it had entered into an agreement to acquire equity interests in Shanghai Bweenet Network Technology, a limited liability company based in China. At the end of the fourth quarter of 2020, 3 hedge funds in the database of Insider Monkey held stakes worth $442,000 in the firm, up from 1 in the preceding quarter worth $34,000.
1. Xperi Holding Corporation (NASDAQ: XPER)
Number of Hedge Fund Holders: 22
Xperi Holding Corporation (NASDAQ: XPER) is a California-based firm that licenses technology and intellectual property. The firm works in industry sectors such as mobile computing, communications, memory and data storage, and three-dimensional integrated circuit technologies. Xperi licenses audio, digital radio, imaging, edge-based machine learning, and multi-channel video user experience solutions to the customers of consumer electronics, automotive manufacturers, and supply chain partners.
The firm has a market cap of more than $2 billion and posted an annual revenue of more than $890 million 2020, a huge jump from the $280 million posted the year before. It has a price-to-earnings ratio of 11.73. In February, the firm declared a quarterly dividend of $0.05 per share, in line with projections. At the end of the fourth quarter of 2020, 22 hedge funds in the database of Insider Monkey held stakes worth $179 million in the firm, down from 23 in the preceding quarter worth $96 million.
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