7 Dirt-Cheap Tech Stocks

By Jordan DiPietro | More Articles
August 17, 2010 | Comments (2)

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Technology stocks are some of the most fascinating and lucrative investments that an individual can make. Yet they can also be extremely volatile, taking investors on a roller-coaster ride that they may have never anticipated.

Fortunately, here at The Motley Fool CAPS we have a way of trying to anticipate which companies are doomed to defeat or poised to pop. Our investing community of 165,000 people aggregates intelligence and ranks stocks according to their ability to outperform the market moving forward. A one-star stock is least likely to outperform, while five-star stocks are the true studs of the investing universe.

Today we'll look at seven tech stocks that have a four- or five-star ranking, yet have taken a real beating as of late. They are all trading well below their 12-month high and have more-than-reasonable P/E ratios. Here is a list of the seven stocks that fit my criteria, listed in rank-order according to how drastically they are trading below their recent high:

Stock	% Below 12-Month High	P/E Ratio	CAPS Rating (out of 5)
TeleCommunication Systems (Nasdaq: TSYS )	71.5%	6.8	****
STEC (Nasdaq: STEC )	69.6%	13.9	****
Conexant Systems (Nasdaq: CNXT )	67.9%	2.5	****
Yucheng Technologies (Nasdaq: YTEC )	65.7%	13.7	*****
DragonWave (Nasdaq: DRWI )	57.4%	5.1	*****
Jinpan International (NYSE: JST )	56.8%	10.0	*****
Neutral Tandem (Nasdaq: TNDM )	54.8%	10.7	*****

Source: CAPS data, Aug 17th.

Although the recovery in the market seems to be stalling, there are plenty of large and small cap, quality companies that are trading at extremely reasonable prices. Tech stocks, which are notoriously expensive, seem to be offering the best opportunity in a decade. Take a look at these seven stocks as a great starting point for your own research -- they've already won over the minds of the CAPS community, so try and distinguish between those companies being dragged down for good reason and those that are just victims of Mr. Market.

Have a strong opinion about any of the companies listed above? Let us hear it in the comments below!

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

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Jordan DiPietro owns no companies above. Jinpan International is a Motley Fool Hidden Gems pick. The Fool owns shares of Neutral Tandem. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On August 18, 2010, at 3:10 PM, jrmart wrote:

STEC investors, you might want to read this 104 page report mentioned below, because STEC is the clear market leader in Enterprise-Storage Solid State Devices. STEC's Zeus product line accounted for over 50% of their revenues in the last quarter.
April 27, 2010 - Objective Analysis has published a new 104 page market report - Data Centers Drive Major SSD Growth ($5,000) which concludes that "the stunning growth of SSDs in enterprise servers and storage systems is only going to get stronger."
The company finds that the enterprise SSD market is likely to approach $4 billion in revenues by 2015, nearly 17x times that of 2009, while unit shipments will increase by 50x during that period to over 4 million units.
Report this Comment On January 25, 2011, at 6:14 PM, clicktheads wrote:

everything is explained here http://longtheworld.com/ click the ads while u there please

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