3 Small Cap Tech Stocks Worth Buying Right Now

Investing has not been easy for most investors this year. But, when you use a strategic system designed for success, it’s not so bad. 

We’ve identified a great sector, and now we have to find some great buys in the tech space right now. To find the stocks which outperform their industries, it helps to look at how they shape up overall in terms of growth, value, and earnings quality. Fortunately, we have found three tech stocks which all have the potential to maintain these traits, making them ideal buys right now.

 NeoPhontics Corporation-(NPTN - Snapshot Report)
 
NeoPhontics designs and produces photonic integrated circuit based modules for high speed communication networks. The company holds a Zacks Rank #1 (Strong Buy).  The semi communications space lies in the top 4% of all industries in the Zacks universe, so NeoPhontics is in good company.
 
NPTN has a price to sales ratio of 1.07, while the industry’s is 2.84.  Generally, a price to sales under three is considered to be good, so NPTN performs well with regards to that valuation measurement.  Its EPS is projected to grow by 170.41% year over year, while the industry is only expected to grow about 25.33% compared to last year.  It’s worth noting that NPTN has a nice PEG of 1.28.
 
In the last 60 days, 2 analysts have revised their earnings estimates.  Both of those revisions to estimates were adjusted upwards. 90 days ago, our consensus estimate had us thinking that we would see earnings of $0.03 per share this quarter. Since then, though, our consensus has been updated, and now expects to see earnings of $0.11 per share.  NeoPhontics has a nice track record of beating our estimates. As a matter of fact, it has beaten our consensus in each of the last four quarters by an average of 138.52% per quarter.  Add in the positive Earnings Expected Surprise Prediction of 9%, and you’ve got a candidate that is very likely to top our current EPS estimate of $0.11. NPTN reports its earnings on 8/6/15.
 
NCI, Inc-(NCIT - Snapshot Report)
 
NCI supplies IT services to government agencies in the US.  It is a Zacks Rank #1 (Strong Buy).  NCI and its peers lie in the top 26% of all industries. It operates in the computer services space.
 
NCIT trades at a forward PE of 13.49, while the industry’s lags behind at 18.58. Its price to sales is 0.43, and is much more efficient the industry’s P/S of 1.37.  NCI’s sales to assets are 2.18, while the industry’s as a whole is just below 1. ROE is a key statistic in determining a company’s ability to grow. Computer service stocks as a whole have a trailing twelve month ROE of 2.62%, but NCI’s ROE is higher at 10.48%. The company’s EPS is projected to be 20.63% higher than last year. The industry is only expected to grow EPS by 7%, though.

Since 90 days ago, our earnings consensus has increased by 11.76%.  NCIT has beaten our earnings estimate in each of the last four quarters, with a beat of 20% just last quarter. The computer service provider announces its earnings on 7/29/15.

 ePlus, Inc-(PLUS - Snapshot Report)
 
ePlus provides technology solutions for businesses. They do this by optimizing the IT infrastructure and supply chain processes of their clients.  PLUS is a Zacks Rank #2 (Buy). It occupies the business software services space, which is in the top 43% of all industries. 
 
ePlus is an “A” in terms of Value in our Style Score, and rightly so.  After all, it trades at a PE of 12.94, while the industry’s as a whole is a whopping 28.5. The company trades at a price to sales of 0.48. The business software services space as a whole trades at a P/S of 3.57.  Its net profit margin is significantly higher than the industry, with net profit margins of 4.01% and 2.73% respectively. Another growth statistic highlighting PLUS’s dominance in the industry is its sales to assets of 2.03. The industry’s S/A is 0.90.
 
Our current consensus estimate calls for earnings of $1.18 per share this quarter.  PLUS may beat our consensus, as it has in each of the last four quarters. It has managed to do so by an average of 11.32% per quarter. The tech company reports its earnings on 8/5/15.
 
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