Tech Plays Offering More Value Than Google

Google grabbed headlines recently when the already-giant technology stock soared 16% in a single day. But in his latest for, Validea CEO John Reese says his Guru Strategies are finding better buys elsewhere in the tech sector.

“Don’t get me wrong — these strategies don’t think Google is a bad pick,” Reese writes. “Currently, they have a ‘hold’ rating on the stock, which still trades at 23 times forward 12-month earnings, pretty reasonable for a tech star. My strategies also like Google’s 20% profit margins, 22% long-term revenue growth, and 13% return on equity (vs. the computer services industry average of -3%).”

“But,” he continues, “while Google has been getting the headlines, my strategies think other lesser-known tech stocks offer more value. That’s often the way it is when you invest based on fundamentals. Stocks of solid but unheralded businesses can slip through the cracks, allowing you to get them at better prices than the big stars.”

Reese highlights 5 of these under-the-radar tech stocks. Among them: Cognizant Technology Solutions, which gets high marks from his Warren Buffett-based model.