Two Techs with High Value Scores
09/21/2016 9:00 am EST
I still see plenty of opportunities to make money in stocks for the remainder of the year, but I think the action will be in stocks still offering attractive valuations, explains Chuck Carlson; here, the editor of DRIP Investor discusses two tech stocks that meet his value criteria.
We looked at stocks offering direct-purchase plans whereby any investor may buy the first share and every share directly, without a broker — that offer compelling values.
We then looked for Quadrix Value scores of at least 65 (out of a possible 100), meaning all of the stocks score in the top one-third in Value across the some 4,600 stocks in the Quadrix universe.
Even better, all of the stocks have an Overall Quadrix score of at least 65. Combining strong Quadrix Overall and Value scores can be a powerful recipe for finding market-beating stocks.
Among the stocks listed here are two technology stocks. Cisco Systems (CSCO) and Qualcomm (QCOM) stand out for their mix of big yields — all both have yields of 3.4% — and Overall Quadrix scores of 90 or higher. Both still offer plenty of value at current prices.
Cisco has beaten earnings and revenue estimates in each of the last 11 quarters — a rare feat. The biggest issue with the company is revenue growth.
However, Cisco seems to be doing a good job of pivoting to higher-growth areas while controlling costs.
The firm just announced layoffs of around 7% of its workforce. The stock has behaved well in recent weeks and is trading around its 52-week high.
Large-cap tech stocks as a group have been doing well, as investors have been drawn to their size, financial strength.
Cisco had some $66 billion in cash and investments at the end of July — and hefty yields. The stock still offers good value at current prices and is a buy.
Following a sharp sell off earlier this year, Qualcomm stock has rebounded nicely in recent months.
Driving the stock has been better than expected earnings and visibility that Qualcomm is making progress in some of its problem areas, notably its licensing activities in China.
This chipmaker remains an innovator and should benefit nicely from the growth opportunities in 5G wireless technology as well as the “Internet of Things” market.
The yield of well over 3%, combined with good dividend-growth potential and further upside, make the stock a compelling holding.
By Chuck Carlson, Editor of DRIP Investor