The Top Unsung Tech-Stock Leaders

Its customer list includes all the top manufacturers -- Sony, Eastman Kodak(EK Quote), Nikon, Samsung, LG Electronics, Royal Philips(PHG Quote), Toshiba, Lexmark International(LXK Quote), Ricoh and Konica Minolta -- which are all looking to lower costs and improve imaging quality with its proprietary designs. In other words, while Intel is focused on businesses and PCs, Zoran gives you exposure to consumer electronics.

Just to focus on one market for a moment, note that industry analysts believe the market for the semiconductors that go into digital television set-top boxes will grow to $7.7 billion in 2010, from $4.7 billion today, an 18% compound annual growth rate. Meanwhile, the chips that go into flat-screen TVs will grow to $6.9 billion in 2010 from $3.5 billion today, a 25% annual growth rate.

Chipmakers leveraged to fast-growing segments like this will find success even if the overall market for technology stalls. I estimate that Zoran -- whose technology team largely hails from Israel but is based in Silicon Valley -- will earn as much as $1.26 per share in 2008 and deserve a price-to-earnings ratio of 25. That would put the stock at $31 next year, amounting to a 55% move. Tune in.