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.

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.

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.

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.

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.

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.

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.

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.