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Here's Why Universal Display (OLED) is a Solid Portfolio Pick
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Shares of computer peripherals producer Universal Display Corporation (OLED - Free Report) have climbed 27.7% over the past year, driven by solid end-market demand across its portfolio on the back of a flexible business model and solid cash flow. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a promising investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Ewing, NJ-based Universal Display is a leading developer of technology and intellectual property (IP) for the Organic Light Emitting Diodes (OLED - Free Report) market. OLEDs are thin, lightweight and power-efficient solid-state devices that emit light. This can be manufactured on flexible and rigid substrates, making them highly suitable for use in full-color displays and as lighting products.
Universal Display is a dominant provider of OLED technology. The technology is likely to eventually replace LED and liquid crystal display (LCD) technologies due to energy efficiency, higher contrast ratio, better viewing angle, lower video response time and smaller form factor. These superior properties of OLED provide ample room for growth.
Strong end-market demand also presents a significant growth opportunity for Universal Display over the long term. OLED is suitable for commercial usage in a number of industries, including smartphones, television, virtual reality devices and automotive markets. The increasing proliferation of smartphones, wearables and tablets is driving the adoption of small-area OLEDs. Large-area OLED displays are increasingly used in televisions. Further, unlike LEDs, OLEDs can be viewed directly and doesn’t need diffusers. It is also expected to be cost-effective when manufactured in high volumes, which makes it suitable for commercial application in the solid-state lighting market.
Universal Display’s dominance in OLED technology is primarily driven by its strong portfolio of around 5,500 patents worldwide. The company’s UniversalPHOLED phosphorescent OLED technology produces OLEDs that are four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs. This provides Universal Display with a competitive advantage over other OLED makers.
Moreover, collaborations with leading centers of excellence like the Princeton University, the University of Southern California, the University of Michigan and PPG Industries will continue to strengthen its patent portfolio in the long haul. The development of a blue phosphorescent emissive system is progressing steadily. Management expects the introduction of the entire series of red, green and blue phosphorescent emissive materials will likely open up several possibilities in a variety of OLED applications.
It has a long-term earnings growth expectation of 15.7% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters.
Other Key Picks
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 579.03%. It has a long-term earnings growth expectation of 13.9%.
It is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Akamai Technologies, Inc. (AKAM - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 10%.
Akamai is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
Viasat Inc. (VSAT - Free Report) , sporting a Zacks Rank #1, enjoys a leading position in the satellite and wireless communications market. Headquartered in Carlsbad, CA, it designs, develops and markets advanced digital satellite telecommunications and other wireless networking and signal processing equipment. The company serves its high-bandwidth, high-performance communications solutions to the public as well as military, enterprises and government enterprises.
Viasat is ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform, which will have nearly 10 times the bandwidth capacity of ViaSat-2. These satellites will be capable of covering one-third of the world, including all Americas.
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Here's Why Universal Display (OLED) is a Solid Portfolio Pick
Shares of computer peripherals producer Universal Display Corporation (OLED - Free Report) have climbed 27.7% over the past year, driven by solid end-market demand across its portfolio on the back of a flexible business model and solid cash flow. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a promising investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Ewing, NJ-based Universal Display is a leading developer of technology and intellectual property (IP) for the Organic Light Emitting Diodes (OLED - Free Report) market. OLEDs are thin, lightweight and power-efficient solid-state devices that emit light. This can be manufactured on flexible and rigid substrates, making them highly suitable for use in full-color displays and as lighting products.
Universal Display is a dominant provider of OLED technology. The technology is likely to eventually replace LED and liquid crystal display (LCD) technologies due to energy efficiency, higher contrast ratio, better viewing angle, lower video response time and smaller form factor. These superior properties of OLED provide ample room for growth.
Strong end-market demand also presents a significant growth opportunity for Universal Display over the long term. OLED is suitable for commercial usage in a number of industries, including smartphones, television, virtual reality devices and automotive markets. The increasing proliferation of smartphones, wearables and tablets is driving the adoption of small-area OLEDs. Large-area OLED displays are increasingly used in televisions. Further, unlike LEDs, OLEDs can be viewed directly and doesn’t need diffusers. It is also expected to be cost-effective when manufactured in high volumes, which makes it suitable for commercial application in the solid-state lighting market.
Universal Display’s dominance in OLED technology is primarily driven by its strong portfolio of around 5,500 patents worldwide. The company’s UniversalPHOLED phosphorescent OLED technology produces OLEDs that are four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs. This provides Universal Display with a competitive advantage over other OLED makers.
Moreover, collaborations with leading centers of excellence like the Princeton University, the University of Southern California, the University of Michigan and PPG Industries will continue to strengthen its patent portfolio in the long haul. The development of a blue phosphorescent emissive system is progressing steadily. Management expects the introduction of the entire series of red, green and blue phosphorescent emissive materials will likely open up several possibilities in a variety of OLED applications.
It has a long-term earnings growth expectation of 15.7% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters.
Other Key Picks
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 579.03%. It has a long-term earnings growth expectation of 13.9%.
It is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Akamai Technologies, Inc. (AKAM - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 10%.
Akamai is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
Viasat Inc. (VSAT - Free Report) , sporting a Zacks Rank #1, enjoys a leading position in the satellite and wireless communications market. Headquartered in Carlsbad, CA, it designs, develops and markets advanced digital satellite telecommunications and other wireless networking and signal processing equipment. The company serves its high-bandwidth, high-performance communications solutions to the public as well as military, enterprises and government enterprises.
Viasat is ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform, which will have nearly 10 times the bandwidth capacity of ViaSat-2. These satellites will be capable of covering one-third of the world, including all Americas.