Barron's R&D Stock Picks
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Date updated:09-27-2008

Research-and-development spending as a guide for buying stocks.

symbol name last price % change open
  • +
  • TLAB
    Tellabs
  • $6.14
  • +0.16%
  • $6.00

Because this R&D-at-a-reasonable-price idea delivered returns amid the Crisis of '08, we screened stocks last week for deeply discounted R&D investments. The result is a contrarian list from which you'd need a strong stomach to buy the high-ranking names: Tellabs (TLAB), Motorola (MOT) and Sun Microsystems (SUNW) have foundered, despite heaps of R&D spending. Their stocks are down by as much as 50% this year.

People owning TLAB also tend to own: AMTANFAVIDCNOCOHCOSTESI

TheStreet.com Rating: C What is this?

  • +
  • MOT
    Motorola Inc
  • $8.89
  • -4.51%
  • $9.26

Because this R&D-at-a-reasonable-price idea delivered returns amid the Crisis of '08, we screened stocks last week for deeply discounted R&D investments. The result is a contrarian list from which you'd need a strong stomach to buy the high-ranking names: Tellabs (TLAB), Motorola (MOT) and Sun Microsystems (SUNW) have foundered, despite heaps of R&D spending. Their stocks are down by as much as 50% this year.

People owning MOT also tend to own: CCLXCVSGOOGGSHDJNJ

TheStreet.com Rating: D+ What is this?

  • +
  • SUNW
    Sunw
  • $0.00
  • N/A
  • $N/A

Because this R&D-at-a-reasonable-price idea delivered returns amid the Crisis of '08, we screened stocks last week for deeply discounted R&D investments. The result is a contrarian list from which you'd need a strong stomach to buy the high-ranking names: Tellabs (TLAB), Motorola (MOT) and Sun Microsystems (SUNW) have foundered, despite heaps of R&D spending. Their stocks are down by as much as 50% this year.

People owning SUNW also tend to own: AAPLAMDCSCODELLGOOGIBMINTC

TheStreet.com Rating: No Rating What is this?

  • +
  • ISRG
    Intuitive Surgica
  • $256.00
  • -1.50%
  • $257.39

Companies more expensively valued relative to their R&D, like surgery-robot maker Intuitive Surgical (ISRG) or the operator of Internet-acceleration servers Akamai Technologies (AKAM) offer less scientific bang for the buck.

People owning ISRG also tend to own: ABBASEINVSPGBAMBBDBWF

TheStreet.com Rating: B What is this?

  • +
  • AKAM
    Akamai Technologi
  • $23.32
  • +2.06%
  • $22.77

Companies more expensively valued relative to their R&D, like surgery-robot maker Intuitive Surgical (ISRG) or the operator of Internet-acceleration servers Akamai Technologies (AKAM) offer less scientific bang for the buck.

People owning AKAM also tend to own: CMGFCXGOOGJECRIGTJXAPA

TheStreet.com Rating: C What is this?

  • +
  • GOOG
    Google Inc.
  • $551.10
  • +0.45%
  • $547.72

Being value-minded, like most quants, Mezrich's measure of research value ranks a company higher if it has a history of high R&D spending but is also an unloved stock. Specifically, he adds up a company's last five years of research spending, then divides by the company's current enterprise value. Google and Apple rank low by this standard. They spend a lot on research, but their stocks are expensive.

People owning GOOG also tend to own: AAPLAMDCSCODELLIBMINTCMSFT

TheStreet.com Rating: B What is this?

  • +
  • GOOG
    Google Inc.
  • $551.10
  • +0.45%
  • $547.72

Being value-minded, like most quants, Mezrich's measure of research value ranks a company higher if it has a history of high R&D spending but is also an unloved stock. Specifically, he adds up a company's last five years of research spending, then divides by the company's current enterprise value. Google and Apple rank low by this standard. They spend a lot on research, but their stocks are expensive.

People owning GOOG also tend to own: AAPLAMDCSCODELLIBMINTCMSFT

TheStreet.com Rating: B What is this?

  • +
  • AAPL
    Apple Inc.
  • $194.34
  • +0.16%
  • $193.00

Being value-minded, like most quants, Mezrich's measure of research value ranks a company higher if it has a history of high R&D spending but is also an unloved stock. Specifically, he adds up a company's last five years of research spending, then divides by the company's current enterprise value. Google and Apple rank low by this standard. They spend a lot on research, but their stocks are expensive.

People owning AAPL also tend to own: AMDCSCODELLGOOGIBMINTCMSFT

TheStreet.com Rating: B+ What is this?

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