Corning Incorporated (GLW) is an Overlooked Tech Play

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Corning Incorporated (NYSE:GLW) is expected to post sales growth of 6% in 2013 on the back of LCD improvements following weakness in 2012. Macro concerns have pressured the company of late, which has been essentially flat year-to-date. Billionaire Ray Dalio upped his stake over 150% in Corning last quarter (check out Ray Dalio's big bets).

BRIDGEWATER ASSOCIATES

Corning's big growth driver has been its Gorilla glass, which is used for handheld devices and tablets. The product is a tough, flexible, scratch-resistant glass formulation. Gorilla glass is already being used in cell phones from Motorola and Samsung, and notebooks from Dell. The company has robust expectations for this segment in particular, predicting that the number of mobile phones using Gorilla glass will quadruple over the next four years. Tablets should also play a key role in this expansion, with an estimated 180 million devices set to have the glass by 2014, compared to a mere 20 million in 2010.

Corning’s long-standing relationship with TV manufacturers has carried the company so far, but it has also been diversifying its business model via acquisitions, including the 2010 acquisition of Plaslab, which manufactures plastic laboratory consumables. Corning has also made strides in the telecom business with its recent acquisition of MobileAccess – a provider of distributed antenna system (DAS) solutions.

From a valuation standpoint, Corning appears to be best-in-show. The glass technology company offers investors the top dividend of its closest competitors with a 2.7% yield, while also giving the best 'growth at a reasonable price' opportunity, trading at a 0.8 PEG. Corning also trades at 9x forward earnings and only 7x cash flow. We like the company's profitability and balance sheet, and it has one of its industry's highest gross profit margins (55%).

So who are some key peers to watch?

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