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
TheStreet Open House

Did the sell-off create some new undervalued tech stocks?

James Dennin, Kapitall: After March-April sell-off we looked for some undervalued tech stocks in case you're bullish on a rebound. 

Yesterday tech stocks regained some of their value, which they've lost in a fairly substantial sell-off over the last month. Today, however, they've started to head back down

Meanwhile, high-dividend stocks and utilities have made gains, which has lead some stability to the markets. 

But technology's performance is a worrying development to some, who worry that it indicates waning confidence in the recovery. 

It's worth asking,  though, whether the sell-off might be a bit of a good thing. Valuations were clearly stretched, and this earnings season presents an opportunity to get stocks trading at closer to fair price. 

If that's the case, then now's the right time to start looking for tech stocks to buy. When market sentiment shifts, it always overcompensates. A tech sell-off will invariably harm certain tech stocks that are doing everything right. 

We screened for undervalued tech stocks by looking at the ratios between levered-free-cash-flow and enterprise-value (LFCF/EV). This means that the company has extra cash on hand, relative to its size. 

Since dividend stocks have been retaining their value better, we also narrowed the screen for companies with a dividend and companies with a market-cap above $2 billion. We were left with 8 names on our list. 

Click on the interactive chart to view dividend yields over time. 

Are these tech plays undervalued or just sitting on too much cash? Use the list below to begin your analysis. 

1. Computer Sciences Corporation ( CSC): Provides information technology (IT) and professional services to governments and commercial enterprises. Market cap at $9.3B, most recent closing price at $63.40.

Levered free cash flow at $1.13B vs. enterprise value at $9.32B (implies a LFCF/EV ratio at 12.12%).  

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

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