3 Cheap Tech Stocks You’ve Never Heard Of

The recent selloff has put some growing tech firms on sale

By Alyssa Oursler, InvestorPlace Contributor

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Wall Street is worried about two things right now: The market’s Black Monday (which was followed by a short-lived recovery, then more damage) and the upcoming Apple (AAPL) event.

3 Cheap Tech Stocks You’ve Never Heard Of (DST SYNA SCSC)
Source: ©iStock.com/gunnar3000

But despite what the headlines may say, Apple isn’t the only tech stock out there. In fact, the recent selloff has put loads of great tech stocks on sale.

This is especially notable considering the fact that the Nasdaq’s beating hasn’t been quite as dramatic as the broader S&P 500’s, and because tech stocks tend to trade for a bit of a premium in exchange for higher rates of growth.

Put another way, finding cheap tech stocks means finding well-priced growth — and isn’t that every investor’s dream?

With that in mind, let’s take a look at a few cheap tech stocks that you may not have heard of.

Cheap Tech Stocks: Synaptics (SYNA)

Cheap Tech Stocks: Synaptics (SYNA)Synaptics (SYNA) started the year off strong but has been on a downward slide since reporting an earnings miss this summer. That reversal has left the stock more or less flat year-to-date.

Despite the fact that shares kept sliding, the stock demonstrated impressive relative strength during the recent bloodbath. And SYNA’s downward momentum combined with market panic now makes Synaptics a great deal.

SYNA is also slated to grow earnings by 15% per year long-term, including a 40% expansion slated this quarter and 20% for the full year. That translates to a forward price-to-earnings under 9 and a price-to-earnings growth ratio of 0.68.

That growth is thanks to the corner of tech Synaptics is focused on — interface (think touchscreens). Put another way, SYNA is in a growing market, and with over 1500 patents issued or pending, Synaptics is set to take advantage of that growth.

Cheap Tech Stocks: ScanSource (SCSC)

Cheap Tech Stocks: ScanSource (SCSC)ScanSource (SCSC) doesn’t have quite the same growth profile as Synaptics, but it’s still a cheap tech stock worth considering. So far this year, SCSC stock has lost nearly 10% — not too pretty.

But a rocky road is the norm for this specialty tech distributor. While recent movement in SCSC levels out to a 34% climb over the last five years, there have been some far more impressive upside swings for those who timed things right.

With the recent market volatility, SCSC stock investors are out more than usual … meaning now is a good time for some bargain hunting. The forward P/E of 11.5 itself is solid, but perhaps even more impressive is the price-to-sales ratio of just 0.31. Which effectively means you’re paying just a dollar for every $3 the company does in revenue.

Still not convinced? Consider this: The lowest analyst price target is $43.20 … that’s nearly 20% upside from current prices.

Cheap Tech Stocks: DST Systems (DST)

Cheap Tech Stocks: DST Systems (DST)DST Systems (DST) is the third cheap tech stock you’ve probably never heard of. Shares of DST have been on a steady upward climb since the Great Recession, but fell of a cliff after weak second-quarter earnings.

Once again, the broader market’s struggles have only added insult to injury. Or put another way, they’ve left DST stock just a tad oversold.

Right now, the company is trading for just seven times its trailing earnings and a forward P/E of 15.6. And it has a lot of fundamental feathers in its caps, including juicy profit margins, an impressive return on equity, a 1.2% dividend yield and nearly 30% gains from current levels to the median analyst target.

It’s important to note, however, that sales growth isn’t expected to be particularly strong for DST, but earnings are still slated to expand by 11% for the long-term.

Translation: Buying on this dip could be the right move to cash in on both the recovery and the growth DST can get inorganically. And if DST never manages to figure out how to boost sales, you simply head for an exit.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/09/cheap-tech-stocks-dst-syna-scsc/.

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