Do you consider yourself a value investor?
If you believe that stocks occasionally trade above and below their fair value, and that profits can be made by correctly predicting this, your answer may be yes.
In the never-ending search for potentially undervalued stocks, we present an idea of how to look for these underpriced names.
Focusing on the tech sector, we ran a screen on about 500 U.S.-traded tech stocks for those trading at the most significant discounts to mean analyst target prices.
Of course, analyst prices tend to be inflated most of the time, so we ran a screen that used the most pessimistic analyst target price as the benchmark for our analysis.
In addition, we only focused on companies that have more than five analysts' target prices (to make sure we only focus on companies that have decent analyst coverage).
Do you think these stocks will meet their analyst targets?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Demand Media
3. Mercury Computer Systems
4. IPG Photonics
6. Interactive Intelligence Group
7. Changyou.com Limited
8. hiSoft Technology International
9. SXC Health Solutions
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Target price data sourced from Thomson/First Call (via Yahoo! Finance).
The Motley Fool owns shares of IPG Photonics. Motley Fool newsletter services have recommended buying shares of IPG Photonics, SXC Health Solutions, Interactive Intelligence Group, and Sohu.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.