This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

7 Tech Stocks With Limited Downside

Stocks in this article: CREE MU SNDK SGI IM RIMM EMC

NEW YORK ( TheStreet) -- There's an old adage about the best investments being made at the worst of times, and while the market may not be in nosedive mode right now, investors are far from hopeful these days.

The American Association of Individual Investors polls its members each week, asking how they feel about the stock market's prospects for the next six months, and the bears have been showing their claws of late. For the week ended Sept. 21, 48% of respondents identified themselves as bearish, up 6.7 percentage points from last week, and well ahead of the long-term average of 30%.

Given this trepidation, Sterne Agee's tech analysts went to work to find "names that are most compelling on valuation and risk/reward with fundamentals that are either not getting worse, or dare we say, might be showing some improvement."

The firm believes there's plenty of opportunity in the tech sector and chose to focus on companies with strong balance sheets and sound business models that it believes will be able to weather the storm if the economy endures another downturn. Because of all the concern about a double-dip recession and the Europe's uncertain sovereign debt situation, valuations are compelling.

"Yet, the same companies' stocks have been decimated and are trading near or at trough valuations and already discounting a recession," Sterne Agee writes in a research note released Tuesday. "In light of dichotomy of awful sentiment, cheap valuation, rapid stock declines, yet not deteriorating fundamentals, and in some cases, improving fundamentals (at least for now), we recommend investor buying a basket of cheap and beaten tech stocks with limited downside and compelling risk/reward."

The stocks the firm would put in that basket are Micron Technology (MU) and SanDisk (SNDK) from the semiconductor space; Silicon Graphics (SGI) and EMC (EMC) offering exposure to data networking and storage; Ingram Micro (IM) and Research In Motion (RIMM) representing hardware and mobile devices; and Cree (CREE) serving as a play on the LED supply chain.


Sterne Agee has a buy rating and a 12-month price target of $14 on Micron, implying potential upside of more than 100% from current prices. The firm thinks weak DRAM pricing will make for a poor performance when the company reports its fiscal fourth-quarter results on Thursday but feels the picture brightens up from there as Micron continues to increase its focus on NAND flash memory products.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs