Favorite Tech Picks For Jan-2012

Technology companies have been hoarding cash for various reasons such as lack of investment opportunities, need to conserve cash to face the volatile times ahead, and a host of others.

Investing legend Warren Buffet who shunned buying technology stocks and instead preferred to lend money to financials such as Goldman Sachs, and Bank of America is now looking to buy technology stocks. My guess is that he is buying the tech stocks for the ��cash hoards'.

Those who have been following Buffet can easily recollect that he bought insurance companies for the ��float money' they offered. It is too early to say whether he will be able to influence the ��dividend payment' strategies of the tech companies he has been buying but we can definitely say that his tech buying spree will not stop with IBM,

Intel and DirecTV. I am not going to predict which tech stocks he is likely to buy, but I am going to pick five tech stocks (not so popular) that could benefit from this trend.

I will focus on those tech stocks whose, 1) cash per share is more than 50 percent of book value per share, and 2) book value per share is more than 50 percent of last traded price. Since my stock prediction is for the short term, I will give more ?emphasis to relative strength index (RSI) as well.

Cash hoards

Kyocera Corp. (KYO) has the highest cash per share of $36.26 while EPIQ Systems Inc. (EPIQ) has the lowest cash per share of $0.15. Incidentally, Kyocera's book value per share of $99.17 is the highest in its industry but the distinction of lowest book value per share goes to Dun & Bradstreet Corp (DNB).

Favorite picks

Motorola Solutions Inc. (ADR) (NYSE: MSI)

On January 4, 2011, the separation of Motorola Mobility Holdings Inc. from Motorola Solutions was completed. In April 2011, th! e compan y completed the sale of its Networks business. MSI is estimated to hold the fourth largest market share in Wi-Fi equipment market.

The company's Q3 EPS of $0.64 exceeded analysts' consensus estimate by $0.05. Consensus Q4 EPS is at $0.74.

Cash per share, book value per share, and last traded price for the stock as of yesterday were $26.35, $32.37, and $46.16. Its 52-week range is $35.7�C$47.91.

There are 14 companies in communications equipment industry that have a relative strength at or above 80.

MSI's peak RSI is at 96.43 while its current RSI is at 59.65. RSI trend is upward so it can test levels at least 80 plus.

I think that the stock could test $55 and establish $50 in January 2012.

Siemens AG (ADR) (NYSE:SI)

Siemens is an integrated technology company with activities in the fields of industry, energy and healthcare. Siemens operates in six segments: Industry, Energy, Healthcare, Equity Investments, Siemens IT Solutions and Services and Siemens Financial Services (SFS). Siemens' strong technological capabilities and highly diverse portfolio of leading global operations in mainly low-risk industries make it attractive.

Siemens' financial risk profile as "modest" is founded on the company's strong balance sheet, exceptional liquidity, sound discretionary cash flow generation through the cycle, and robust financial flexibility. Siemens is appointing former U.S. Gen. Stanley McChrystal to chair a board overseeing a newly created unit designed to better challenge GE (GE) on its home turf and help the German conglomerate double its annual U.S. government orders to $2 billion by 2015.

Cash per share, book value per share, and last traded price for the stock as of yesterday were $21.03, $47, and $91.9. Its 52-week range is $84.86�C$146.74.

I think that the stock could test $115 and establish $110 in January 2! 012.

Lexmark International Inc.? (NYSE:LXK)

Lexmark has two segments: Imaging Solutions and Services (ISS) and Perceptive Software. The company develops and owns the technology for its laser and inkjet products, software related to managed print services, and ECM solutions.

While Lexmark is a new entrant into the market, it has been extremely aggressive in acquiring companies that will increase its presence in the space. Lexmark is in the early stages of a strategic shift to higher usage printers and more profitable supplies sales.

Cash per share, book value per share, and last traded price for the stock as of yesterday were $15.49, $17.74, and $32.04. Its 52-week range is $25.87�C$40.54.

I think that the stock could test $45 and establish $41 in January 2012.

Other favorite picks include - IAC/InterActiveCorp, Cisco Systems Inc, CA Inc, Patni Computer Systems Ltd. (ADR), and Applied Materials Inc.

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