The technology sector has been a huge outperformer for well over a year. If you were to take a ratio of the tech-heavy Nasdaq 100 to the S&P 500, you would see the trend in the relative strength highly favor the Nasdaq since the December 2018 low.
It’s not exactly unusual to see technology lead in a bull market, but that’s not exactly what we’ve been experiencing. However, the predominance of a handful of tech names have weighed heavily on the market and has led to this dynamic.
As you break down the Nasdaq, you can look at the percentage of stocks above their 20-day, 50-day and 200-day moving averages. Right now, there are 91% od NDX stocks above their 20-day moving average, 96% above their 50-day and 75% above their 200-day moving average. While 75% of companies above their 200-day moving average is a lot, it’s not historically high. That means that the laggards and more value-oriented stocks will need to participate more fully to keep the ball rolling.
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The following list is five tech stocks that have at least a $100 million and are trading at relatively low valuations compared their sector.
Here are two other bullish stock lists to draw from.
Tech Value Stock #1: Canadian Solar Inc (NASDAQ: CSIQ)
CSIQ is a global solar power company. The company produces solar wafers, solar cells and solar power products.
The company announced earnings on May 28, 2020 and beat analyst EPS estimates by 20%. The company saw net revenue decline from the fourth 4Q of 2019 but came in substantially higher than 1Q 2019 at $826 million and $485 million, respectively.
The company has a lower P/E than 95% of companies in its industry at 3.73 and a P/B lower than 85% of the industry at 0.76.
Tech Value Stock #2: Ebix Inc (NASDAQ: EBIX)
EBIX is a supplier of software and e-commerce solutions to the insurance industry. Its software applications include carrier systems, agency systems and exchanges.
The company announced earnings on May 11, 2020 and saw operating income decline 37% to $34.3 million from $54.1 million in Q1 2019. The company attributed the decline to the impact of COVID-19. However, the company saw a 41% increase in operating cash flow year-over-year in Q1.
The company has a lower P/E than 91% of companies in its industry at 8.02 and a P/B lower than 75% of the industry at 1.47.
Tech Value Stock #3: JinkoSolar Holding Co., Ltd (NYSE: JKS)
JKS has a vertically integrated solar power product value chain. The company’s integration goes from recovering silicon materials to the production of solar modules.
The company is scheduled to release their quarterly results for Q1 on June 15. As a Chinese company, we’ll have to wait to see how production and sales were impacted due to the COVID-19 closures.
The company has a lower P/E than 92% of companies in its industry at 8.38 and a P/B lower than 93% of the industry at 0.55.
Tech Value Stock #4: Synnex Corp (NYSE: SNX)
SNX provides a range of distribution, logistics and integration services for the technology industry. The company’s technology solutions segment distributes peripherals, IT systems such as data servers and storage, equipment, and software.
The company has earnings coming up on June 25, 2020. The company has consistently beaten analyst estimates, most recently by 3.82% in their March report. The company had $296 million in cash and generated $58 million in free cash flow as of their last report.
The company has a lower P/E than 85% of companies in its industry at 10.75 and a P/B lower than 73% of the industry at 1.49.
Tech Value Stock #5: VirnetX Holding Corporation (NYSEAMERICAN: VHC)
VHC is an Internet security software and technology company. Their portfolio of products is focused primarily on securing communications over the Internet and the establishment and maintenance of a secure domain registry.
The company announced their earnings report on May 11, 2020. The company went from $8 million in revenue in 1Q 2019 to over $302 million in 1Q 2020. The resulting jump in revenue created a huge jump in cash to over $435 million from $3.15 million and net income from a loss of $5.6 million to making $299 million.
The company has a lower P/E than 98% of companies in its industry at 1.7 and a P/B lower than 71% of the industry at 1.56.