Are Techs (IBM) (ONNN) (LAVA) (GLW) Undervalued?

Shares of ON Technologies (Nasdaq:ONNN), IBM (NYSE:IBM), Magma Design Automation (Nasdaq:LAVA) and Corning Inc. (NYSE:GLW) appear to be undervalued, as the tech sector continues to roll, even in the midst of concerns it could be approaching bubble proportions again.

Technology is well beyond peak earnings from late 2007 - proof that these companies are getting the job done despite doubts.

IBM (IBM) is an example of that assertion. 2010's EPS of $11.58 beat 2009's $10.01, both of which were better than 2007's $7.13. In fact, IBM is working on its seventh year in a row of bottom line growth.

Semiconductor maker ON Technologies (ONNN) is just coming off its best year in its history. Without using any accounting tricks, it has a trailing P/E of 15.5 and forward-looking (12-month) one of 7.71, making it desirable for investors.

Strongest Earnings Growth

If Magma Design Automation (LAVA) hadn't already posted a significant improvement in earnings on a rolling year-over-year basis, it might be hard to believe it could grow income by 59 percent in fiscal 2012, which it probably will.

Corning Inc. (GLW) with its PEG ratio of 0.96 appears to have found the best balance profit growth and current valuation. GLW is priced under 10 times its past and future earnings. It grew earnings by 41 percent, and is on pace for modest growth this and next year. With more beats than misses over the last couple of years though, the G in the PEG ratio may end up being bigger than expected.

IBM was trading at $162.81, up $1.44, or 0.89 percent, as of 1:14 PM EDT. ON Semiconductor was at $9.99, up $0.01, or 0.10 percent. Magna was trading at $6.585, down $0.055, or 0.83 percent. Corning was at $21.19, down $0.26, or 1.19 percent.




Source

Needham Raises PT on Magma Design (NASDAQ:LAVA)

Citing what appears to be an improved EDA industry, Needham & Company has increased their price target on Magma Design (NASDAQ:LAVA) and maintained their "Buy" rating on them.

Needham said, "In 2QF11, Magma continued its recent run of solid execution, slightly beating our top and bottom line estimates and inching up its full year guidance. With EDA industry conditions appearing to be improving, we believe the company is positioned to continue to meet or exceed estimates over the near-to-medium term, with the main swing factors to the upside being potentially regaining some momentum in P&R (admittedly, the most competitive EDA sub-segment) with its new Talus products, or landing some larger deals with its Titan analog products...F11 goes to $135MM/$0.26 PF EPS from $134MM/$0.24 and F12 goes to $144MM/$0.35 from $143MM/$0.31 with $0.02 of the change from a lower assumed tax rate (15% vs. 20%)."

Magma closed Friday at $4.40, dropping $0.03, or 0.68 percent. Needham raised their price target on them from $4 to $5.25.