5 Small-Cap Stocks Identified As Undervalued In The Technology Sector – (SPWR, GTAT, TSL, FSLR, CIEN)

  on Sep 05,2012 Posted in Investment Ideas ,Small Cap Ideas
 
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The Price-to-sales ratio is useful because it compares the current stock price to the yearly sales. In other words, it helps you find out how much the stock costs per dollar of sales earned. It is calculated as the current stock price divided by the annual sales per share. The annual sales per share figure should be derived from taking the net sales for the past four quarters divided by the fully diluted shares outstanding. Both of these figures are easily accessible by press releases or quarterly reports.

All things equal, a lower P/S ratio is considered better. However, this ratio gives better results when comparing more than one company. In this article, we searched for stocks that have a low price-to-sales ratio (below 1) and reported high sales growth in last five years (above 25%). Today we focused on small cap stocks in the technology sector.

SunPower Corporation (NASDAQ:SPWR)’s last closing price was $4.23 per share and maintains price-to-sales ratio at 0.33%. In the last five years, the company’s full-year sales growth remained over 185.92% a year on average and the company’s earnings per share moved up by an average rate of -19.41%. SPWR, an integrated solar products and services company, designs, manufactures, and delivers solar electric systems for residential, commercial, and utility-scale power plant customers worldwide.

GT Advanced Technologies Inc (NASDAQ:GTAT) at its latest closing price of $5.43, has a price-to-sales ratio of 0.72. Tracking  the last five years, GT Advanced Technologies Inc’s sales grew 73.89% a year on average and the company’s net income advanced by an average rate of 45.92%. GTAT provides polysilicon production technology and crystalline ingot growth systems, and related photovoltaic (PV) manufacturing services for the solar industry worldwide.

Trina Solar Limited (ADR) (NYSE:TSL) ended the last trade at $4.21 a share and the price is down more than -36.98% so far this year. The company maintains price to sales ratio of 0.21. Its earnings stood at 78.03% a year on average in the period of  the last five years. The company’s net income reported an average growth rate of 38.43%.

First Solar, Inc (NASDAQ:FSLR)’s profit did move up 82.95% a year on average over the past five years and its sales growth moved at a higher pace over the same period with a raise of 35.94% a year on average. FSLR engages in the design, manufacture, and sale of solar modules using a thin-film semiconductor technology in the United States and internationally.

Ciena Corporation (NASDAQ:CIEN) provides equipment, software, and service solutions that support the transport, switching, aggregation, and management of voice, video, and data traffic on communications networks worldwide. Ciena Corporation has a market value of $1.38 billion at latest $13.74 a share. The company’s price-to-sales ratio stands at 0.75. Over the last five years, the company’s sales boosted by 25.30% a year on average and its earnings per share growth remained 97.48%.

 Disclosure: Opinions expressed in this article are those of the authors alone who have no stake in any stocks mentioned, and did not plan to acquire any stake within the next 72 hours.

 



 

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