5 Laggard Tech Stocks to Rebound

BOSTON (TheStreet) -- Technology stocks, leveraged to the fortunes of the economy, have been the worst performers since the benchmark S&P 500 Index hit a peak at the end of April.

Investors are worried about numerous ailments: housing in the U.S., Greece's debt overload, supply disruptions in Japan -- you name it.

But, domestic economic growth is predicted to accelerate in the second half of the year. So, why are investors dumping the stocks that would benefit from a pickup? They apparently have little faith in the forecasting skills of the Federal Reserve and economists from global investment banks.

The skepticism is justifiable. Both groups have made serious errors of prescience in the past and the future is inherently uncertain. However, should growth quicken, as the consensus holds, so-called cyclical stocks, including tech, are likely to rally most.

Bargain hunters should consider two groups: the worst-performing S&P 500 technology shares over the past month and the current cheapest, based on forward earnings projections. The 60 tech companies in the benchmark index delivered a median loss of 8.3% in the past month.

First, a snapshot of the one-month losses of the stock-market correction's 10 tech laggards:

Computer Sciences Corp. (CSC), -13%
NVIDIA (NVDA), -14%
Teradyne (TER), -14%
Akamai Technologies (AKAM), -15%
Autodesk (ADSK), -16%
Advanced Micro Devices (AMD), -20%
MEMC Electronic Materials (WFR), -20%
Micron Technology (MU), -21%
JDS Uniphase (JDSU), -22%
Juniper Networks (JNPR), -24%

Now, here is a closer look at the five cheapest tech components in the S&P 500. Although value is no guarantee of performance, these businesses are exceedingly cheap.

5. Teradyne (TER) is not only among the cheapest S&P 500 tech stocks, but also made the list of tech poor performers. Teradyne sells high-tech automatic-test equipment, used in electronics, automotive and aerospace manufacturing. Despite the stock's 14% drop over the past month, it's still up 21% over a 12-month span. The company grew first-quarter sales 18% as net income rocketed 81%. The operating margin rose from 19% to 21%, signaling stronger pricing. Teradyne receives positive reviews from two-thirds of analysts in coverage. Citigroup forecasts a rise of 71% to $24. Teradyne's forward earnings multiple of 7.4 reflects a semiconductor peer discount of 45%. It's also cheap based on book value and sales.

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