Large-Cap Tech Values (CSCO, INTC, HPQ)

Investors who are looking to take some risk in stocks, but also believe in the primacy of preserving capital may want to look at some undervalued names in the large-cap technology space. In particular, bargains can be had in Cisco Systems CSCO, Intel INTC and Hewlett-Packard HPQ. All of these names are blue-chips that have underperformed the market in 2010, and may be ready to bounce back in a big way in 2011. Furthermore, at current valuations, these stocks appear to be safer than many alternatives. Cisco Systems CSCO was hit by a poor earnings report and very disappointing guidance in November. The shares fell from over $24 to around $19 in a day. This type of quarter is experienced by most companies from time to time, and given CSCO's pedigree, it seems reasonable to give the company the benefit of the doubt and assume that things will improve going forward. At 15 times trailing earnings, a forward P/E of just 11 and a PEG ratio of 1.02, the stock seems like a good value candidate. Considering CSCO's long-term history of execution and its place near the top of the technology industry, CSCO appears to be a Buy at current levels. Intel (INTC) has also had a rough year, rising just 2.72% in 2010. Brighter days, however, look likely for the company, which is the leading global manufacturer of semiconductors. Given current valuations, INTC could be in store for a big run in 2011. The shares trade at a trailing P/E of 11.34, a forward P/E of 10.75, and a PEG ratio of 0.89. The stock sure looks like a value-laden blue chip at current levels. Hewlett-Packard HPQ has been beat up in 2010 after the company dismissed its CEO Mark Hurd, who subsequently joined Oracle ORCL. Despite Hurd's departure, and the ensuing debacle, it was only a temporary setback. Furthermore, the entire episode is providing investors with a longer term horizon a very nice entry point in the name. From a value perspective, HPQ continues to look very cheap given the company's track record. HPQ shares trade at a trailing P/E of 11.53, a forward P/E of 7.48, and a PEG ratio of 0.84. Look for a nice bounce back in 2011 in the stock.