Are These 2 Tech Stocks Trading At A Discount?

Friday’s PreMarket Prep Plus broadcast featured Sean Udall, the Tech Stock Strategist and publisher of The Udall Report. Sean is a unique type of investor that combines fundamental and technical analysis along with closely tracking investor sentiment.

Udall was asked for two issues in the technology sector that in his opinion are trading to a discount to what he deems as fair market value.

Intel: Udall is still pounding the table on Intel Corp. INTC, which he describes as the “ultimate safe-haven play with a potential upside return of 75-100%.” He believes the market capitalization of the company is half what the company is actually worth based on its current business.

Udall compared the company to Advanced Micro Devices AMD, which has lower sales but a much higher market capitalization. What makes Udall long-term bullish is that he believes eventually their chip fabrication business will be $200 billion and being assigned as a zero-one right now.

"Or their chip fabrication is being valued correctly or their current sales being valued at zero," he said. "One of those is wrong."

Splunk: Another beaten-down technology stock Udall is buying is Splunk Inc. SPLK. He bought some ahead of its last report and looking to add to the position at lower prices.

In the case of Splunk, it comes down the numbers. Investors may look at the headline number and consider it a miss. However, ARR (annual recurring revenue), specifically its cloud AR was up 97% over their prior year, which brings its total ARR to 47%.

Udall views the changeover from the old one-time fee model to the subscription model as a boon to the bottom line, but cautions there is a “weird timing lagging effect between AAR growth and revenue growth.”

The full discussion from Friday’s broadcast can be found here: