The key is to find these stocks when they have solid support in place in terms of their asset value. There are many bargains in the materials sector, which is great for long-term value hunters, but of little consequence to short-term traders.

Whither High Tech?

In recent weeks, Dell ( DELL) and Cisco Systems ( CSCO) warned of even deeper weakness in their European operations.

Expect to hear from more technology firms about Europe in coming weeks. Some may preannounce results soon rather than wait for the scheduled reporting date.

Even companies with just 20% to 30% of sales derived from abroad may be hard-pressed to deliver the forward guidance analysts are currently anticipating.

Simply put, weakening foreign sales may be the key theme of this upcoming earnings season. And this could bleed over into slumping stock prices.

Because the tech sector has so much exposure to Europe and Asia, I went looking for stocks that might be especially vulnerable. So many companies in this space have been relying on foreign markets for growth in the past decade, which looks like a big millstone right now.

I'm most concerned about tech stocks with high valuations. Take the "40/40" club, for example. These are stocks that trade for more than 40 times projected 2012 profits and derive at least 40% of their sales outside the U.S. All told, I've found 15 stocks that make the list. I have listed them in the table below.

By definition, this list only includes companies that are expected to be profitable in 2012, because I screened for stocks with positive forward price-to-earnings ratios. Any money-losers may be equally (if not more) vulnerable, even if they didn't make the list above.

Risks to Consider: These stocks are not automatic sell candidates, nor are they ripe for shorting. In some instances, weak foreign sales are already reflected in share prices.

Action to Take: The stocks in this list aren't the only ones you should be worried about. You should be checking the European exposure of each company in your portfolio, while checking its valuation.

The key is to focus on companies that appeared to perform quite well in recent quarters, shrugging off the foreign headwinds that had just been emerging. These headwinds are now growing stronger and it's hard to see how those companies can overcome the gravitational pull of a sagging Europe and Asia.

David Sterman does not personally hold positions in any securities mentioned in this article.

StreetAuthority LLC owns shares of AA, CSCO, PG, in one or more if its "real money" portfolios.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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