Related tickers: Apple Inc. (NASDAQ:AAPL), First Solar, Inc. (NASDAQ:FSLR)
With the first financial quarter of 2013 behind us, it is time to take a look at the latest figures released detailing the valuations present in the S&P 500. Investors will be particularly interested in analyzing how tech stocks have fared in terms of price-to-free cash flow ratios. In general, a low P/FCF ratio translates to an undervalued share and it is a valuation method which investors can use to determine the likeliness of an increase in price. The lower the P/FCF ratio is, the higher the chances of prices increasing. While analyzing the S&P index, our attention was drawn by two highly covered tech stocks: Apple Inc. (NASDAQ:AAPL) and First Solar, Inc. (NASDAQ:FSLR).
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Apple Inc. (NASDAQ: AAPL), while undoubtedly one of the most popular Wall Street stocks, barely made our top ten, coming in last, with a P/FCF of 11.15. Still, it’s in the upper-crust of cheap players in this sector. Although Apple’s market capital is not what it used to be half a year ago, when it situated itself in the$ 600 billion range, the company has shown slight signs of recovery over the past month. Its market capital has reached $435.38 billion, and its market price has risen from approximately $420 (the beginning of April 2013) to $463.84. Its current P/FCF, although the lowest in our top ten, is still in Apple’s favor, meaning that market prices will most likely slowly increase in the second quarter.
Nonetheless, considering the strong competition Apple Inc. (NASDAQ: AAPL) has faced over the past months, from other big names in the mobile phone industry, such as Blackberry or Samsung, investors will have to keep a close eye on the company’s P/FCF ratio for even the slightest changes. From Wall Street’s point of view, Apple seems to be on the rebound, but in the stock market, nothing can be taken for granted.
At the other end of the spectrum, First Solar, Inc. (NASDAQ:FSLR), the tech stock with the lowest market capitalization (3.96B) out of these ten stocks, did manage to score a little better than Apple, coming in 8th, with a P/FCF of 10.66. Over the past month, the company’s market price has almost doubled, from a little over $25 (April 2013) to $45.21. The P/FCF ratio First Solar currently boasts seems to indicate that the company will continue its upward transition in the months to come, despite the cries of many bears.
We would like to present ten tech stocks that currently have the lowest FCF valuations. Apart from Apple Inc. (NASDAQ:AAPL) and First Solar, Inc. (NASDAQ: FSLR), the slideshow also looks at other popular stocks such as Xerox Corp. (NASDAQ: XRX) and Hewlett-Packard Company (NASDAQ:HPQ).
So, let’s take a look at the countdown: