5 Tech Stocks to Buy for 2013: Cadence Design
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK ( TheStreet Ratings ) -- TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
TheStreet Ratings model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to its stock's performance.
These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel -- rather, use them as a starting point for your own research.
The following pages contain our analysis of 5 out of 50 stocks TheStreet Ratings has identified as being rated a "Buy" heading into the New Year. To view a list of all 50 stocks simply download our FREE report by clicking: HERE
RF Industries (RFIL"> RFIL) is rated at BUY with a grade of A+. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
To view a list of all 50 stocks simply download our FREE report by clicking: HERE
Highlights from the ratings report include:
- Powered by its strong earnings growth of 900.00% and other important driving factors, this stock has surged by 30.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Net operating cash flow has significantly increased by 306.68% to $1.39 million when compared to the same quarter last year. In addition, R F INDUSTRIES LTD has also vastly surpassed the industry average cash flow growth rate of 1.81%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 1069.8% when compared to the same quarter one year prior, rising from $0.06 million to $0.74 million.
- RFIL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.91, which clearly demonstrates the ability to cover short-term cash needs.