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Under-the-Radar Tech Stocks for Today

"Under-the-Radar Stocks" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

Technology stocks took the spotlight Monday as Cisco (CSCO - Get Report) was selected to replace General Motors (GM) in the Dow Jones Industrial Average.

Apple (AAPL - Get Report), Research in Motion (RIMM), Amazon (AMZN - Get Report) and Google (GOOG), known as the "four horsemen of tech," have jumped more than 40% this year as the Nasdaq has risen 16%. Despite the tech rebound, undiscovered bargains remain. The following small-cap companies offer strong balance sheets, a discount and, the ultimate tech rarity, high dividend yields. Ratings

Minnetonka, Minnesota-based Communications Systems (JCS - Get Report) makes and sells modular connecting and wiring devices and media and rate conversion products in the U.S., U.K. and China. Although the company's first-quarter revenue declined 12%, earnings per share ballooned 650%. Communications Systems has an ideal financial structure. It holds just $3 million of debt and over $31 million in cash reserves. Ratings upgraded Communications Systems to "buy" on May 12.

In line with the company's impressive operating performance, its stock has risen 37% this year. Nevertheless, the shares remain cheap compared with other communications equipment firms. They trade at a price-to-earnings ratio of 10.88, 58% cheaper than the peer average. The shares are also cheap on the basis of sales and book value. At its current price, the stock offers a dividend yield of 5.26%, higher than the S&P 500 Index's average of 3.42%. The company has a market value of just $82 million.

Huntsville, Alabama-based Adtran (ADTN - Get Report) develops products and services that provide access to communications networks. The company's first-quarter sales and earnings per share fell 8% to $111 million and $0.24, respectively. Although those results suggest weakness, Adtran is poised for growth due to its strong financial position. The company boasts a quick ratio of 3.97, indicating ample cash reserves, and has a low debt-to-equity ratio of 0.12. Ratings lifted the stock to "buy" on April 30.

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ADTN $20.61 0.44%
AAPL $127.76 1.10%
AMZN $382.69 -1.30%
CSCO $28.92 -1.30%
GOOG $571.21 -0.72%


DOW 17,944.25 -191.47 -1.06%
S&P 500 2,080.88 -20.16 -0.96%
NASDAQ 4,945.31 -37.4990 -0.75%

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