Everyone loves a bargain, and with these small cap stocks undervalued as well as being priced under $5 per share, SuperGen, Inc. (NASDAQ: SUPG), PLX Technology, Inc. (NASDAQ: PLXT), and Network Engines, Inc. (NASDAQ: NEI) are simply no-brainers. Take a look.
Not that a P/E ratio is everything (especially a forward-looking one), but with PLX Technology, Inc. priced at a plausible 20.6 times 2012's estimates earnings, I'm interested. See, though it would be a swing to a profit for PLXT, it's not hard to believe just because electronics manufacturer has been profitable before... in 2007, before the recession crushed its bottom line. This small cap company posted it's best annual revenue ever last year though, and the top line has continued to grow while the bottom line has been shrinking - it's on the right trajectory.
That earnings multiple of 20 isn't a bargain by static standards, but you guys know how this works.... PLX Technology will trade at what investors think it will be worth 1 to 2 years out. If/when it swings to a profit in the next two to three quarters, the market should start pricing PLXT based on 2013's earnings, which is probably a P/E of sub-10 right now based on current growth rates.
Slowly but surely Network Engines, Inc. shares have been cranking out gains. NEI is up about 20% for the last four weeks, but it's staying off most radars simply because the incremental gains have been so small. The word is starting to get out on this small cap stock though, so if you were on the sidelines, you many want to get off now.
NEI is a telecom tech stock, priced at a reasonable 14.2 times trailing earnings, and 12.8 times forward-looking earnings. There's no room for a 'wow' factor in there though, which is why it's being ignored. That's fine. Those who are trickling into Network Engines in the meantime though just so happen to be buying into a small cap that's only topped earnings estimates - by a lot - in each of its last four quarters.
Finally, this isn't the first time I've touted SuperGen, Inc., and it won't be the last either. This is one of those rare biopharma names that's profitable, and will be in the future; the pros are looking for an EPS of $0.17 this year, and $0.24 next year. SUPG is priced at 11 times its trailing earnings, for perspective. And, shares have been making steady, even if slow, progress.
The biggest challenge with SUPG is that - compared to a lot of other high-profile biotech names - there's no blockbuster breakthrough in the works like you see with other biotech names in the news. (Of course, most of those other high-profile R&D studies never actually get a drug to the market.) SuperGen doesn't need it though... it's already got a very marketable product that it can milk for several more years. Given the way the chart's starting to act, however, investors are starting to see the advantageous risk/reward scenario here with this small cap stock.