MW-ID610_GOOGP__ZG_20200402061830.jpg

Deep Dive: 20 technology stocks with low debt to consider owning in a down market

This post was originally published on this site

Mark Grant, the chief global strategist for fixed income at B. Riley FBR, is usually focused on the bond market, but he had an interesting suggestion for long-term investors that he shared with Stuart Varney on Fox Business:

After quoting the adage, “You buy when there’s blood on the streets,” Grant suggested that for “appreciation plays,” investors look “in technology,” where there are some “good names without any debt … you can make some money on, with a little patience.”

The S&P 500 Index SPX, -4.41%  has tumbled 27% since its closing high Feb. 19, while the S&P 500 information technology sector has declined 25%.

A tech-stock screen

There are 70 companies in the S&P 500 information technology sector. However, the sector excludes several companies that the typical investor would consider technology players. So we added social-media companies, video-game developers and internet-services companies to bring our “technology” list up to 80 companies.

Here are the 20 companies on the list with the lowest ratios of long-term debt to equity, per their most recent financial reports, according to FactSet:

Company Ticker Long-term debt/ equity Total return – Feb. 19 through April 1 Total return – 2020 Total return – 2019 Date of most recent financial report Industry
Fortinet Inc. FTNT, -0.69% 2.2% -16% -6% 52% 12/31/2019 Computer Communications
IPG Photonics Corp. IPGP, -4.06% 2.4% -26% -27% 28% 12/31/2019 Semiconductors
Arista Networks Inc. ANET, -4.83% 2.8% -14% -5% -3% 12/31/2019 Computer Communications
Skyworks Solutions Inc. SWKS, -7.75% 3.4% -31% -32% 84% 12/27/2019 Semiconductors
Jack Henry & Associates Inc. JKHY, -5.26% 3.8% -15% 1% 16% 12/31/2019 Information Technology Services
Take-Two Interactive Software Inc. TTWO, -1.92% 5.9% 2% -5% 19% 12/31/2019 Recreational Products
Alphabet Inc. Class A GOOGL, -5.15% 6.8% -28% -18% 28% 12/31/2019 Internet Software/Services
Alphabet Inc. Class C GOOG, -4.92% 6.8% -27% -17% 29% 12/31/2019 Internet Software/Services
Paycom Software Inc. PAYC, -7.21% 8.4% -42% -29% 116% 12/31/2019 Software
Facebook Inc. Class A FB, -4.32% 8.9% -27% -22% 57% 12/31/2019 Internet Software/Services
Cognizant Technology Solutions Corp. Class A CTSH, -8.52% 11.5% -38% -31% -1% 12/31/2019 Information Technology Services
Synopsys Inc. SNPS, -2.20% 11.6% -24% -10% 65% 01/31/2020 Software
Ansys Inc. ANSS, -9.13% 12.7% -29% -18% 80% 12/31/2019 Software
Micron Technology Inc. MU, -5.16% 13.3% -34% -26% 69% 02/27/2020 Semiconductors
Salesforce.com Inc. CRM, -6.89% 13.6% -30% -18% 19% 01/31/2020 Software
Electronic Arts Inc. EA, -2.64% 13.7% -11% -9% 36% 12/31/2019 Recreational Products
Accenture Plc Class A ACN, -5.26% 14.1% -28% -26% 51% 02/29/2020 Information Technology Services
Intuit Inc. INTU, -5.17% 14.7% -29% -17% 34% 01/31/2020 Software
F5 Networks Inc. FFIV, -2.72% 15.1% -20% -26% -14% 12/31/2019 Computer Communications
Cadence Design Systems Inc. CDNS, -1.21% 16.5% -18% -6% 60% 12/28/2019 Software
Nvidia Corp. NVDA, -7.79% 17.2% -23% 3% 77% 01/26/2020 Semiconductors
Source: FactSet

You can click on the tickers for more about each company, including news coverage.

Scroll the table to see all the data.

The table actually includes 21 stocks, with both common share classes for Alphabet US:GOOGL US:GOOG.  

The stock screen is only a starting point for further research. The debt-to-equity ratios are as of the dates indicated on the table, to the right. A company may have issued more debt since that date or made other announcements of importance to investors.

If you see any companies of interest here, you not only need to make sure you are familiar with the most recent announcements, you need to consider the company’s strategy and form your own opinion about it’s ability to remain competitive for the next decade.

Grant indicated there were opportunities in the tech space for investors “with a little patience,” but these are really long-term plays. What does “a little patience” mean to you? If you scoop up discounted shares now, you may need to wait a few years to make money.

Don’t miss: These 60 large U.S. companies are ‘susceptible to a dividend cut,’ according to Jefferies

More from MarketWatch