With respect to stocks, Merriam-Webster defines risk as "the chance that an investment (as a stock or commodity) will lose value." So how can we mitigate this risk? Many investors simply choose to avoid riskier sectors, like tech. But there's a better way. Mitigate the chance for loss by buying stocks with a margin of safety. On that note, here are two low-risk stock picks: Apple (NASDAQ: AAPL ) and Baidu (NASDAQ: BIDU ) .
Economic moat
"In business, I look for�economic castles protected by unbreachable�moats," Warren Buffett has famously said.
Determining a company's margin of safety is impossible if the company doesn't possess some sort of economic moat. An economic moat is what protects a company's future cash flows from competitors. If a company doesn't have any sort of competitive advantage, it would be impossible to estimate future cash flows, a key ingredient to any stock valuation. And a margin of safety, of course, cannot be determined without valuing a stock to determine your best estimate of the company's value.
5 Best Tech Stocks To Own Right Now: Silicom Ltd(SILC)
Silicom Ltd. engages in the design, manufacture, marketing, and support of connectivity solutions for a range of servers and server based systems in the North America, Europe, and internationally. The company primarily offers high-end server networking cards with and without bypass that are known as server adapters. Its server adapters are used in various applications that include security appliances, wide area network optimization appliances, load balancing and traffic management appliances, network-attached storage, video on demand servers, content delivery servers, Internet service providers/Web hosting, and high end computing. Silicom Ltd. also offers intelligent and programmable cards, such as encryption acceleration cards and redirector cards; intelligent stand alone bypass units; 10 Gbps products with and without bypass; and server to appliance converters. It markets its products through original equipment manufacturers, distributors, and resellers. The company was founded in 1987 and is based in Kfar Sava, Israel.
Advisors' Opinion:- [By Seth Jayson]
Silicom (Nasdaq: SILC ) reported earnings on July 22. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended June 30 (Q2), Silicom beat expectations on revenues and beat expectations on earnings per share. - [By Evan Niu, CFA]
What: Shares of Silicom (NASDAQ: SILC ) plunged today by as much as 12% after the company reported earnings.
So what: Revenue in the quarter added up to $15.7 million, with non-GAAP earnings per share of $0.48. Both figures topped consensus estimates of $15.5 million in sales and $0.40 per share in adjusted profit, but still weren't enough for investors.
5 Best Tech Stocks To Own Right Now: SureWest Communications(SURW)
SureWest Communications provides a range of telecommunications services in northern California, the greater Kansas City, and Kansas and Missouri areas. It provides data, video, and voice services to residential and business customers. The company?s data services include high-speed Internet access; video services comprise pay-per-view channels, video on demand (VOD) service, and premium VOD channels, music channels, and an interactive, on-screen program guide; and voice services consist of value-added services, such as voicemail, call waiting, caller identification, and other calling options. The company also offers Voice over Internet Protocol (VoIP) digital phone; and telecommunications services, including traditional circuit-switched voice, long distance, and various lightly-regulated or non-regulated services, as well as wholesale access services. In addition, it provides business communications services comprising fiber-optics-based high-speed Internet, customized dat a and Ethernet transport services, data center and disaster recovery solutions, traditional landline and VoIP phone services, wireless backhaul, and digital television services to small, medium, and large business customers. As of December 31, 2011, the company served approximately 107,100 residential subscribers; and had approximately 8,000 business customers. SureWest Communications was founded in 1914 and is headquartered in Roseville, California.
5 Best Value Stocks To Own For 2014: Mobile TeleSystems (MBT)
Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Armenia, and Belarus. The company provides a range of mobile and fixed line voice and data telecommunications services, including transmission, broadband, pay-TV, and various value-added services; and sells equipment and accessories. It also offers network access services, including mobile cellular voice and data communication services; automatic roaming services; GPRS and Internet access services; and 3G technology. In addition, the company�s services include the design, construction, and installation of local voice and data networks capable of interconnecting with fixed line operators; installation and maintenance of cellular payphones; lease of digital communication channels; and provision of access to open computer databases and data networks, including the Internet, as well as video conferencing, and fixed, local, and long-distance telecommunications services. Its value-added services comprise call divert/forwarding, caller ID and anti-caller ID display, conference calling, WiFi, GPRS, intelligent call assistant, APN remote access point, fixed mobile convergence, enhanced data rates for GSM Evolution, call barring, SMS, mobile office, voicemail, mobile banking, wireless application protocol, MTS-Connect, SIM-browser, point-to-point transfer, unstructured supplementary services data, downlink packet access, mobile TV, call waiting, MMS, ring tones, missed call alert, itemization of monthly bills, information and directory, international access, WEB and WAP portal, customer care system, ring back tone, collect call, and location-based services. As of December 31, 2011, the company had a mobile subscriber base of approximately 101.14 million. It has a strategic partnership with Vodafone. The company was founded in 1993 and is headquartered in Moscow, the Russian Federation.
Advisors' Opinion:- [By Rich Smith]
Over in Russia, market-leading cell phone provider Mobile TeleSystems (NYSE: MBT ) has just confirmed that, as of 2012, it no longer sells Apple's (NASDAQ: AAPL ) new iPhone models to its customers directly. The company does still stock, and sell, some older iPhone models. But for iPhone5 and on up, MTS now answers phone calls from Apple with a Spasibo, ne nada. ("Thanks, but no thanks.")
- [By Eric Lam]
Manitoba Telecom (MBT) gained 5.7 percent to C$33.93 after selling its Allstream fiber network business to Accelero Capital Holdings for C$520 million. The company will use the cash to invest in new wireless spectrum and improve the speed of its existing networks, Manitoba Telecom said in a statement.
5 Best Tech Stocks To Own Right Now: Dyadic International Inc (DYAI)
Dyadic International, Inc. (Dyadic), incorporated in September 2002, is a holding company. The Company is a global biotechnology company. The Company has operations at the United States and the Netherlands. Dyadic uses its technologies to conduct research and development (R&D) and commercial activities for the discovery, development, manufacture and sale of enzymes and proteins for the bioenergy, industrial enzyme, and biopharmaceutical industries. The Company derives all of its revenues from the licensing of its technologies, the sale of its enzymes and conducting research and development (R&D) activities for third parties. The Company operates in two segments: the United States operations and The Netherlands operations. The United States segment includes a subsidiary in Poland.
The United States operating segment is a developer, manufacturer and distributor of enzyme products, proteins, peptides and other bio-molecules derived from genes and a collaborative licensor of enabling technologies for the development and manufacturing of biological products and use in R&D. The Netherlands operating segment is also a researcher and developer of enzyme products, proteins, peptides and other bio-molecules derived from genes and, to date, has mainly invested in R&D activities.
Dyadic�� R&D activities focus on its fungal strains and associated technologies. Dyadic uses its Trichoderma and C1 fungal strains in the production of its industrial enzymes. Dyadic manufactures and sells liquid and dry enzyme products to global customers for use within the animal feed, pulp and paper, starch and alcohol, food and brewing, textiles, and biofuels industries.
Dyadic also utilizes a technology platform based on its patented and C1 fungus (the C1 Platform Technology), which enables the development and manufacture of proteins and enzymes for diverse market opportunities. The C1 Platform Technology can also be used to screen for the discovery of novel genes and proteins. The C1 Platf! orm Technology also has the potential of developing and producing other biological products such as antibodies, vaccines, proteins and polypeptides for the biopharmaceutical industry.
5 Best Tech Stocks To Own Right Now: Evolving Systems Inc.(EVOL)
Evolving Systems, Inc. provides software solutions and services to the wireless, wireline, and Internet protocol (IP) cable markets. It offers Dynamic SIM Allocation solution that offers carriers a way to provide wireless services by activating and assigning resources to the wireless device when it is first used; and Tertio, a service activation solution for carriers to activate a new subscriber or to add a new service to an existing subscriber, as well as provides an operating environment to manage their voice, data, and content service needs for their IP networks. The company?s LNP and WNP software solutions comprise OrderPath order entry; NumberManager network provisioning; LNP DataServer data warehousing; VeriPort NPAC testing; and Verify product suite for monitoring carriers? application communications. In addition, the company provides billing mediation products, which include Evident that supports convergent voice, data, and content services, and enables the managem ent of data, allowing reconciliation of data inputs and outputs. Further, it offers network mediation products, including Mediation Central that supports a range of technologies that carriers deploy in their network, and provides support for wireline, broadband, transport, and wireless networks; and Traffic Data Management System, a product for wireline carriers to collect usage data from their circuit switch networks. The company also provides various professional and integration services for the design, customization, integration, and deployment of its products. It operates primarily in the United States, the United Kingdom, Indonesia, Greece, and Canada. The company was founded in 1985 and is headquartered in Englewood, Colorado.
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