We have said many times that the bloated U.S. stock market was bound for a correction. Now as the stock market crash unfolds, many companies have seen their share prices dropping to 52-week lows. But sometimes this is just a sign of Mr. Market overreacting, and smart investors will find profitable opportunities scattered on the floor. With that mission in mind, let’s take a look at three technology stocks that just hit their 52-week lows.
Daktronics Inc. (NASDAQ:DAKT)
You are very likely to have unintentionally enjoyed products made by Daktronics Inc. (NASDAQ:DAKT). The company is the world’s leading designer and manufacturer of electronic scoreboards, programmable display systems, and large-screen video displays. The company was founded in 1968 by two electrical engineering professors at South Dakota State University. Most recently, Daktronics was selected to build the largest display in college football. (Source:Daktronics, last accessed August 26, 2015.)
The company didn’t plan very well in the timing and product mix in its Live Events business in the most recent quarter. As a result, Daktronics experienced a sales decline. Its stock price tanked as well: Daktronics closed at $8.20 on Wednesday, slightly above its 52-week low of $8.18.
The upshot is; the situation might not be as bad as what the stock market thinks. Despite the recent slowdown, the company did have a good year in fiscal 2015: sales were up 11.6% compared to 2014, and the firm’s international business unit had over $100 million in sales for the first time in history. (Source:Daktronics, last accessed August 26, 2015.) If the company manages to plan more strategically like they did in fiscal 2015, this year could be a success too.
At today’s low price, Daktronics has a price to earnings ratio of 17.45. It also pays dividends—with a quite handsome yield of 4.88%.
PDF Solutions Inc. (NASDAQ:PDFS)
PDF Solutions Inc. (NASDAQ:PDFS) provides integration technologies for integrated circuits (ICs). The company’s solutions help its clients lower costs of IC design and manufacturing. It offers a test chip called Characterization Vehicle (CV), which has been used by more leading manufacturers than any other test chip in the industry. The company also offers Exensio, a yield management and fault detection and classification enterprise software system. The system has been used at leading semiconductor fabrication plants around the world.
The company’s stock price took a huge hit recently after the most recent earnings report. PDF Solutions’ business declined in the second quarter, with revenue down six percent year-over-year. Still, the company managed to remain profitable, with adjusted net income of $5.9 million, or an EPS of $0.18 for the quarter. (Source:PDF Solutions, last accessed August 26, 2015.)
PDF Solutions’ stock price just hit its 52-week low of $11.28. Right now it trades at $11.63. The company’s main goal this year is to accelerate its investments as the industry trend shifts, which might not be good for revenue at the moment, but could bring more competitiveness in the long term.
For instance, there has been a trend to shift the industry in Asia, in particular to China. Being adaptive, PDF Solutions has been driving significant new business activity in Asia, and engaged in several new contracts in the recent quarter.
Marvell Technology Group Ltd. (NASDAQ:MRVL)
Marvell Technology Group Ltd. (NASDAQ:MRVL) is a fabless semiconductor company, meaning it designs and sells semiconductor chips while outsourcing the fabrication of the devices to a specialized manufacturer. The company has more than 7,000 employees worldwide and ships over one million chips a year.
Both top and bottom lines deteriorated for the company in the first quarter of fiscal 2015. However, the company still generated an adjusted net income of $71.0 million, or $0.13 per share.
The company just hit its 52-week low of exactly $10.00 and since then has been slowly trending up. Right now Marvell Technology Group trades at $10.47 a share, giving it a reasonable price to earnings (P/E) ratio of 15.28, significantly lower than the industry’s 22.38. Marvel Technology Group is also a dividend-paying company with a dividend yield of 2.30%.
One thing to notice about Marvell Technology Group is its debt-to-equity ratio of zero—the company has no debt. Moreover, it has a quick ratio of 4.76, meaning it has decent ability to cover its short-term liquidity needs.
Analysts are expecting strong demand for the company’s 4G LTE products in future quarters. Moreover, Marvell Technology Group’s newly introduced Internet of Things (IoT) solutions would provide more sources for growth. Once that growth is realized, expect a rally for its stock price.