A Small-Cap Cloud Play With Momentum – QLogic Corporation (QLGC): Google Inc (GOOG), Microsoft Corporation (MSFT)

No debt, plenty of cash relative to its small market capitalization, and an extremely impressive current ratio paint only part of the picture:

With revenues declining by about $100 million from 5 years ago, accompanied with a declining share price, the company has managed to increase its EPS. Declining revenues are not good, and the company’s projected EPS are also expected to be lower– giving the company a forward P/E of about 15, according to Yahoo Finance. Still, with cloud computing and related markets exploding in growth, revenues should pick up– even faster if global economic recovery occurs and the macro environment continues to inch its way back to normal.

The bottom line

QLogic is so strong financially that a trailing P/E of only 6 is ridiculous. The company also has bright future prospects. QLogic would make a good “spec play” for your portfolio to get exposure to the cloud computing revolution. If you choose to invest in this company, you will not be alone. Billionaire hedge fund manager Ken Griffin recently increased his stake in the company and his fund, Citadel Investment Group, now owns about 5% of the company– holding around 4.6 million shares.

The article A Small-Cap Cloud Play With Momentum originally appeared on Fool.com and is written by Joseph Harry.

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