Should You Buy These 2 Tech Stocks?

David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

If you are bullish on technology, Corning (NYSE: GLW) and TE Connectivity (NYSE: TEL) are two stocks to consider buying. They have witnessed a rally but are largely in "turnaround mode." Both companies were previously the subject of investor anxiety due to poor macro trends, but have their growth stories since changed? Below, I consider the momentum and growth opportunities of the two companies.

Watch this Gorilla 

Corning is one of the world’s largest glass and ceramics manufacturer whose products are used in more than 1 billion devices worldwide. For all the fears surrounding LCDs, the company has done surprisingly well. Corning’s new Gorilla Glass 3 is targeting the “phablet” market, a smartphone/tablet combination, which is a phone but uses a screen larger than 5”. Last year, the phablet market saw a sale of 25.5 million units, and this year, it’s expected to exceed 60 million -- most of these products will use the highly resistant Gorilla Glass.

Why is Gorilla Glass 3 better than Gorilla Glass 2? It has a much more resistant surface for better scratch and damage protection and will be first used in products somewhere around mid-2013.

I also like the company's Willow Glass. This product is highly relevant for the relentless waves of consumer electronics innovation. It is a highly flexible glass that will enable companies like Apple to move beyond the traditional flat surface.

Apple is reportedly looking into marketing an iWatch that will inevitably have to use Willow Glass.

At around 12.1 times trailing earnings, Corning is reasonably priced. The PEG ratio is around 1, so growth expectations have been fully factored into the stock price. And the company is very liquid with a current ratio of 5.2, so it can easily pursue accretive takeover opportunities without meaningfully threatening its credit rating.

A buy despite weakness?

TE Connectivity, a Swiss company, saw growth in most states in its first quarter of 2013. Revenue in Pennsylvania alone went up to $277 million, $17 million more than in the same period last year. But, this still did not meet expectations. Weakness was seen in Oregon, where losses have piled up from high capital expenditures. Ultimately, the company has lowered top-line guidance as a result of soft momentum.

The company is now planning to downsize its medical division by 137 workers -- half of which will be processed immediately and the other half in the following month. I believe, however, that the bar has been set low.

EPS growth over the past five years has come out to a rate of 15.5% -- only 10.1% is expected in the next five years. Analysts still currently rate the stock a 1.9 out of 5, where 1 is a "buy." The stock has risen to its 52-week high and still provides a strong 7.3% free cash flow yield.

Despite its bull run (54% above its 52-week low), TE Connectivity is surprisingly compelling from a value perspective. It trades at only 16 times trailing earnings while Amphenol (NYSE: APH) trades at 21.9 times earnings for virtually the same growth prospects. Amphenol, however, has a much cleaner balance sheet with a current ratio of 3.3. In addition, Amphenol's price may be the result of the craze surrounding the fiber optic market.

Conclusion

Corning and TE Connectivity offer a nice way to gain exposure to the electronic market in general and the touchscreen & telecom markets in particular. Despite their rise, both continue to be attractive on a multiple basis compared to peers. Add in the promising growth stories, and you have two great stocks to invest in!

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David Gould has no position in any stocks mentioned. The Motley Fool recommends Corning. The Motley Fool owns shares of Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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