Stocks Under $10: Most Undervalued Network Plays?

Richard Suttmeier |

Stocks Under $10: Most Undervalued Network Plays?The Computer & Technology sector is 4.7% overvalued with the Computer – Networks industry 1.4% undervalued, according to www.ValuEngine.com. The Peripheral Equipment Industry 13.2% undervalued. All 15 of the stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots.

Brocade Communications Systems, Inc. (BRCD) – has been below $10 since the week of May 11, 2007.
Digi International Inc. (DGII) – has only been below $10 since October 10, 2012.
Emulex Corporation (ELX) – has only been below $10 since April 20, 2012.
eMagin Corp. (EMAN) – has been below $10 for at least five years. Traded up to $9.31 on February 14, 2011 then failed.
Extreme Networks Inc. (EXTR) – has been below $4.75 for at least five years.
Intermec, Inc. (IN) – has been below $10 since the week of August 12, 2011.
Infinera Corporation (INFN) – has been below $10 since the week of January 28, 2011.
Key Tronic Corp. (KTCC) – has been trading back and forth around $10 since August of this year.
Logitech International SA (LOGI) – has only been below $10 since September 13, 2012.
Mitek Systems Inc. (MITK) – has on been below $10 since April 3, 2012.
Novatel Wireless Inc. (NVTL) – has been below $10 since the week of January 21, 2011.
Planar Systems Inc. (PLNR) – has been below $10 since the week of February 23, 2007.
QLogic Corp. (QLGC) – has only been below $10 since October 19, 2012.
Sierra Wireless Inc. (SWIR) – has been below $10 since the week of August 12, 2011.
TransAct Technologies Incorporated (TACT) – has been below $10 since the week of August 19, 2011.

Network Stocks Under 10

Reading the Table

OV / UN Valued – The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. The most undervalued stock in today’s table is PLNR by 49.5%. The most overvalued stock is MITK by 106.8%.

VE Rating – A “1-Engine” rating is a Strong Sell, a “2-Engine” rating is a Sell, a “3-Engine” rating is a Hold, a “4-Engine” rating is a Buy and a “5-Engine” rating is a Strong Buy. Today we have thirteen Hold rated stocks and two Sell rated stocks according to ValuEngine.

Last 12-Month Return (%) – Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage over the past twelve months! The biggest gainer over the past twelve months is KTCC higher by 105.8%. The biggest loser is MITK with a loss of 58.4%.

Forecast 1-Year Return – Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. NVTL and PLNR are projected to be the biggest losers by 9.6% and 9.1%. We do not have a single stock projected to gain 5% or more over the next twelve months.

P/E Ratios – We only have two stocks with a single-digit P/E. Another five have reasonable P/E ratios. Four have elevated P/E ratios.
Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.

Where to Buy and Where to Sell - A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A "Pivot" is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon.  These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.

Buy and Trade Guidelines:  Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BRCD Brocade Communications Systems Inc. 9.14 0.03 0.33 3,760,095
DGII Digi International Inc. 11.64 -0.30 -2.51 72,556
EMAN eMagin Corporation 2.69 0.07 2.67 35,503
EXTR Extreme Networks Inc. 4.49 0.00 0.00 677,370
INFN Infinera Corporation 8.85 -0.07 -0.78 1,151,827
KTCC Key Tronic Corporation 7.42 0.01 0.13 7,769
LOGI Logitech International S.A. 21.51 -0.13 -0.60 489,096
MITK Mitek Systems Inc. 8.11 -0.08 -0.98 195,038
PLNR Planar Systems Inc. n/a n/a n/a 0
QLGC QLogic Corporation n/a n/a n/a 0
SWIR Sierra Wireless Inc. 14.15 -0.11 -0.77 146,756
TACT TransAct Technologies Incorporated 7.40 -0.06 -0.80 6,400
WMS Advanced Drainage Systems Inc. 24.51 0.02 0.08 233,934

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