6 Undervalued Tech Giants with A Sustainable Competitive Advantage?

The tech industry has come under fire recently due to a string of IPOs. Companies such as Groupon, Zynga and now Facebook are IPOing with billion dollar floats and many are calling it signs of a bubble. It's almost every week now that we're hearing about startup x and startup y raising at hundred million dollar plus valuations with minimal revenue.

However, while there's been a lot of focus on the new guys on the block, investors have started to neglect the more mature companies that have been self-sustaining for quite some time and may have competitive advantages.

We scoured the web to find tech companies with billion dollar market caps, what looks like a competitive advantage and are undervalued according to a discounted cash flow valuation with a 15% discount rate.

Here are 6 giants that might need to be dusted off and given more attention. Do you think these tech behemoths are worth a second look or should we put them back on the shelf?

1. Adobe Systems Inc. (ADBE)

ADBE is a diversified, international software company offering a line of creating, business, Web and mobile software and services used by creative professionals, knowledge workers, developers, marketers, enterprises and consumers. Out of 1,937 ratings from Motley Fool's CAPS community, 1,818 (93%) are bullish about outperformance but they've only given it a CAPS rating of 3 out of 5 stars. The average analyst target price is $34.72, according to MarketWatch. Our Growth Price pegs the fair value at $40.13, making the stock undervalued by 24.62%. We have also identified a potential competitive advantage based on ADBE's net profit margin over the past 10 years, hovering around the 20% mark. Whether it is sustainable is up to you to decide. ADBE is currently trading at $32.20 with a market cap of almost $16B.

2. Garmin Inc. (GRMN)

GRMN designs, develops, manufactures and markets global positioning system enabled products and other navigation, communication, and information products worldwide. Out of 4,816 ratings from Motley Fool's CAPS community, 4,386 (91%) are bullish about outperformance but they've only given it a CAPS rating of 2 out of 5 stars. The average analyst target price is $52.05, according to MarketWatch. Our Growth Price pegs the fair value at $63.98, making the stock undervalued by 41.59%. We have also identified a competitive advantage based on GRMN's net profit margin over the past 10 years, averaging at the 26% mark. Whether it is sustainable is up to you to decide. GRMN is currently trading at $45.19 with a market cap of almost $9B.

3. Oracle Corp. (ORCL)

ORCL develops, manufactures, markets, distributes and services enterprise-level database and middleware software, applications software and hardware systems worldwide. Out of 3,612 ratings from Motley Fool's CAPS community, 3,400 (94%) are bullish about outperformance and they've given it a CAPS rating of 4 out of 5 stars. The average analyst target price is $34.04, according to MarketWatch.Our Growth Price pegs the fair value at $33.50, making the stock undervalued by around 24%. We have also identified a competitive advantage based on ORCL's net profit margin over the past 10 years, averaging at the 24% mark. Whether it is sustainable is up to you to decide. ORCL is currently trading at $27 with a market cap of around $134B.

4. Dolby Laboratories (DLB)

DLB designs and manufactures video and audio products for film production, cinema and television broadcast industries. Out of 4,065 ratings from Motley Fool's CAPS community, 3,971 (98%) are bullish about outperformance and they've given it a CAPS rating of 5 out of 5 stars. The average analyst target price is $48.71, according to MarketWatch. Our Growth Price pegs the fair value at $53.94, making the stock undervalued by around 20%. We have also identified a competitive advantage based on DLB's net profit margin over the past 10 years, averaging at the 22% mark. Whether it is sustainable is up to you to decide. DLB is currently trading at $44.92 with a market cap of almost $5B.

5. Cisco Systems Inc. (CSCO)

CSCO designs, manufactures and sells Internet protocol based networking and other products related to the communications and information technology industry worldwide. Out of 10,848 ratings from Motley Fool's CAPS community, 10,342 (95%) are bullish about outperformance and they've given it a CAPS rating of 5 out of 5 stars. The average analyst target price is $22.05, according to MarketWatch.Our Growth Price pegs the fair value slightly higher at $23.54, suggesting a margin of safety of 42.56%. We have also identified a potential competitive advantage based on CSCO's net profit margin over the past 10 years, averaging around the 19% mark. Whether it is sustainable is up to you to decide. CSCO is currently trading at $16.51 with a market cap of around $89B.

6. QLogic Corporation (QLGC)

QLGC designs and supplies storage networking, high performance computing networking and converged networking infrastructure solutions. Out of 257 ratings from Motley Fool's CAPS community, 240 (93%) are bullish about outperformance but they've only given it a CAPS rating of 3 out of 5 stars. The average analyst target price is $17.13, according to MarketWatch. Our Growth Price pegs the fair value slightly higher at $18.94, suggesting a margin of safety of 24.04%. We have also identified a competitive advantage based on QLGC's net profit margin over the past 10 years, averaging around the 24% mark. Whether it is sustainable is up to you to decide. QLGC is currently trading at $15.27 with a market cap of around $1.5B.