Small-Cap Tech Stocks With Blowout Earnings

BOSTON (TheStreet) -- Technology companies have produced blowout earnings, with companies such as Apple AAPL and Intel INTC hogging the headlines. Here are five small-cap tech firms thriving in the recovery of business spending. They are ordered by net-income growth, from fast to fastest. 5. Fairchild Semiconductor FCS designs power analog and power discrete chips. Quarter: Fairchild swung to a second-quarter profit of $44 million, or 34 cents a share, from a loss of $25 million, or 20 cents, a year earlier. Revenue gained 47%. The operating margin turned positive. Fairchild has $460 million of cash and $445 million of debt. Stock: Fairchild has risen 3.9% during the past year, trailing the Nasdaq by 12 percentage points. It trades at a price-to-projected-earnings ratio of 6 and a price-to-cash-flow ratio of 4.4, 54% and 73% discounts to semiconductor peer averages. Consensus: Of analysts covering Fairchild, six, or 46%, rate its stock "buy", five rate it "hold" and two rank it "sell." A median target of $12.06 suggests 32% of upside. FBR Capital Markets FBCM is more bullish, expecting the stock to more than double to $20. 4. NetGear NTGR sells networking products for homes and small businesses. Quarter: NetGear swung to a second-quarter profit of $10 million, or 29 cents a share, from a loss of $3.3 million, or 10 cents, a year earlier. Revenue increased 35%. The operating margin rose from 1% to 11%. NetGear has $231 million of cash and no debt. Stock: NetGear has appreciated 40% during the past 12 months, outperforming the Nasdaq by 24 percentage points. It sells for a PEG ratio, a measure of value relative to predicted long-run growth, of 0.1, an attractive 90% discount to estimated fair value. Consensus: Of researchers following NetGear, four, or 44%, advise purchasing its shares and five recommend holding. None advocate selling the stock. A median target of $28.57 implies a return of 20%. Barclays BCS forecasts a share price of $33. To read the rest, head over to TheStreet.com