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Looking for Value in the Tech Sector? Check Out These 4 Stocks

Looking for Value in the Tech Sector? Check Out These 4 Stocks

Posted On January 17, 2022 2:21 pm
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Investors’ growing concerns about forthcoming Federal Reserve interest rate hikes to combat the multi-decade high inflation led to the tech-heavy Nasdaq Composite to decline in the first trading week of this year. Consequently, several technology stocks are currently trading at reasonable valuations.

Since growing demand for tech products and solutions amid remote lifestyles and ongoing digitization is expected to drive the tech industry’s growth, the impact of rising interest rates may not hamper tech stocks from moving higher for longer. Investors’ interest in this space is evident in the iShares U.S. Technology ETF’s (IYW) 25.8% gains versus the SPDR S&P 500 Trust ETF’s (SPY) 22.3% returns over the past year. The U.S. tech industry spending is expected to exceed $1.8 trillion in 2022.

So, we think it could be wise to invest in undervalued tech stocks International Business Machines Corporation (IBM – Get Rating), HP Inc. (HPQ – Get Rating), NortonLifeLock Inc. (NLOK – Get Rating), and Cirrus Logic, Inc. (CRUS – Get Rating).

International Business Machines Corporation (IBM – Get Rating)

Armonk, N.Y.-based IBM provides integrated solutions and services worldwide. The company operates through six segments—Cloud & Cognitive Software; Global Business Services; Global Technology Services; Systems; Global Financing; and Other. It offers application, technology consulting and support, process design and operations, cloud, digital workplace, network services, business resiliency, strategy, and design solutions.

On Jan.7, 2022, IBM’s IBM Watson Advertising announced data availability from The Weather Company, an IBM Business, on Amazon.com, Inc.’s (AMZN) AWS Data Exchange platform. By providing weather datasets through AWS Data Exchange in the cloud, IBM Watson Advertising is looking forward to harnessing the relationship between weather and consumer behavior using AI to extract deep insights and help businesses make more confident, data-driven, and insightful enterprise decisions.

IBM’s total revenues for its fiscal 2021 third quarter, ended September 30, 2021, increased marginally year-over-year to $17.62 billion. The company had $7.46 billion in cash and cash equivalents as of Sept. 30, 2021.

Analysts expect the company’s EPS to increase 11.7% year-over-year to $9.49 in its fiscal year 2021, ended Dec. 31, 2021. It surpassed the consensus EPS estimates in each of the trailing four quarters. IBM’s EPS is expected to grow at a 6.9% rate per annum over the next five years.

Over the past month, the stock has gained 9.9% in price to close yesterday’s trading session at $134.76. In terms of forward EV/EBITDA, IBM is currently trading at 9.46x, which is 42% lower than the 16.31x industry average. And the stock’s 10.83x forward Price/Cash Flow is 52.9% lower than the 23.02x industry average.

IBM’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

IBM has a B grade for Quality and Value. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for IBM’s Momentum, Stability, Growth, and Sentiment here. IBM is ranked #11 of 49 stocks in the B-rated Technology – Hardware industry.

HP Inc. (HPQ – Get Rating)

HPQ in Palo Alto, Calif., provides personal computing and other access devices, imaging and printing products, related technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses, and enterprises, including government, health, and education sectors worldwide.

On Jan. 4, 2022, HPQ unveiled new devices and solutions at the CES 2022 event that are designed to enhance collaboration and creation experiences in hybrid working structures. Enhanced by HP’s new portfolio of conferencing and collaboration solutions, HP Presence, the HP Elite Dragonfly G3, the new HP Elite Dragonfly Chromebook, and the new

 

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