Smoke Screen? Searching For Tech 'Growth/Value' Plays
It's tempting to fish for bargains in the tech sector's bloody big-cap pool, but it's far from easy.
OK, the tech-laden Nasdaq Composite is down more than 45% from its March 10 high and many big PC and computer chip shops are looking like they're on sale. For this week's Big Screen we made a quick and dirty pass through big-cap tech-land. We trolled for tech companies that might have that magic combination of earnings growth and a battered stock. We sifted U.S. big-cap tech stocks for those with estimated annual earnings growth over the next five years that tops 20%, a stock price at least 40% off its 52-week high and a forward price-to-earnings ratio
of less than 35 -- roughly half that of the average tech stock, according to Morningstar. Our humble screen turned up eight stocks, mainly of semiconductor or chip shops -- which had a nice bounce on Friday. Here they are, ranked by their P/E ratio over the next four quarters' projected earnings, according to Bulldog.com Research. Let's poke through them and consider how you might go about separating the wheat from the chaff. | Tech Bargains or Tech Traps? If you're bottom-fishing in the big-cap tech pool, you'll probably turn up some of these names. Then what? | ||||
| Stock | P/E Forward Four Quarters | Estimated Five-Year Earnings Growth | YTD Return | |
| Micron Technology(MU) | 9.4 | 20.8% | -21.6% | |
| Applied Materials(AMAT) | 12.9 | 25.2 | -36.9 | |
| Dell Computer(DELL) | 16.3 | 25.6 | -65.8 | |
| Motorola(MOT) | 16.7 | 21.1 | -63.7 | |
| Intel(INTC) | 19.3 | 20.6 | -21.4 | |
| Altera(ALTR) | 23.3 | 26.1 | 9.5 | |
| Solectron(SLR) | 23.7 | 31.1 | -40.5 | |
| Xilinx(XLNX) | 27.9 | 28.1 | -5.7 | |
| Texas Instruments(TXN) | 29.1 | 23.2 | -11.1 | |
| Source: Morningstar and Bulldog Research.com. Through Dec. 7. | ||||
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