Technology stocks have performed very well in recent months. The and , heavily comprised of technology companies, are up 8.29% and 9.95% over the past three months. In comparison, the rose by 6.16% and the gained 3.62%.
Small-cap stocks also performed better than the broader market. The index, which tracks U.S. small businesses, rose 9.41% over the same period.
With interest rates expected to continue falling and investors anticipating rate cuts at every next FOMC meeting this year, the outlook appears positive for technology stocks and small-cap stocks. These types of stocks tend to benefit when rates fall.
We decided to focus on opportunities related to small-cap US technology stocks. Using Investing.com’s filter, we filtered out U.S. technology companies with market values between $300 million and $2 billion, giving us a list of 234 stocks.
Our next step was to find the most undervalued stocks on this list, while taking into account their financial health.
We applied the following search filters:
Stocks with 30%+ upside potential based on InvestingPro fair value. Financial health score greater than 3 out of 5 on InvestingPro.
NOTE: InvestingPro Fair Value calculates an intelligent average of several recognized valuation models for each stock on the market. The Health Score, on the other hand, is based on several key financial indicators and peer comparisons to assess the financial strength of a company. If you are not already an InvestingPro subscriber, click here to subscribe now!
This first round of selection allowed us to identify 10 promising stocks:
Although the basic functions of the Screener are available for free, in this research we used metrics reserved for InvestingPro subscribers, Pro+ plan. If you have a Pro+ subscription, click here to be directed to this saved search directly on the Screener.
According to InvestingPro Fair Value, these stocks are undervalued by 31.9% to 60.9%.
We then looked for the small US technology stocks favored by analysts. We used these criteria:
Stocks covered by at least 10 analysts. Upside potential of more than…..
