Growth-at-Reasonable-Price Stocks May Be Better Than Famine-or-Feast

It's a tale of two extremes this week in technology: Twitter will probably price its initial public offering on Wednesday night at a lofty 13x sales, as BlackBerry announces the collapse of its tentative deal with Fairfax Financial. One company has multiple buyers, the other may not have any.

The two firms encapsulate two opposite investment strategies, momentum vs. value. Twitter doesn't make money yet, but it's adding 155,000 users per day. BlackBerry has shrunk every year since 2010 and offers patents plus cash on the balance sheet (whose sum Brian Battle of Wedge Partners pegs at $4-5/share).

So, let's look past BlackBerry, Twitter and other outliers, and instead focus on the middle of tech's bell curve, screening the sector for growth-at-a-reasonable-price (GARP). We set a fairly high bar, searching for those tech companies within the S&P 1500 estimated to grow earnings in 2014 at least 30 percent (five times faster than the overall market) and whose stocks trade at no more than 30x forward earnings (less than twice the valuation of the overall market.) In other words, we want sizzle without getting sizzled.

Just three large cap companies made the cut, and we shared them on-air:

Then we found an additional four mid-cap companies and nine small caps. Here they are, for our blog readers and Twitter followers: Adtran Inc. (ADTN), Advanced Energy Industries Inc. (AEIS), Atmel Corp. (ATML), ATMI Inc. (ATMI), Compuware Corp. (CPWR), Digi International Inc. (DGII), Diodes Inc. (DIOD), MKS Instruments Inc. (MKSI), Monolithic Power Systems Inc. (MPWR), Progress Software Corp. (PRGS), RF Micro Devices Inc. (RFMD), Super Micro Computer Inc. (SMCI), Symmetricom Inc. (SYMM).

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