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With several interesting trends like the Internet of Things and artificial intelligence on the rise, it is an exciting time to be investing in the technology sector. What’s more, it is also a profitable time to be a tech-focused investor, as this space has been among the strongest performing sectors all year.
And while the behemoths like Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) may hog all the headlines, it’s really been the companies powering their technologies—the semiconductor manufacturers—that have had a strong year on the markets.
Indeed, as our Computer and Technology sector has gained nearly 13% year-to-date, semiconductor companies have been a driving factor behind its growth. The aforementioned emerging tech trends have created new consumer demand, and the semiconductor makers are delivering.
Luckily, the proven Zacks stock picking methods are effective across all industries. Check out these Zacks Rank #1 (Strong Buy) semiconductor stocks right now:
Lam Research is a designer and manufacturer of semiconductor processing equipment used in the fabrication of integrated circuits. The company is recognized as a leading supplier of front-end wafer processing equipment to the worldwide semiconductor industry.
In its latest report, Lam posted earnings of $2.80 per share and revenue of $2.15 billion, beating our respective consensus estimates of $2.54 and $2.13 billion. The company will wrap up its fiscal year in the current quarter, and our consensus estimates call for full-year totals to mark EPS growth of 57% and sales growth of 36%. Looking ahead, we’ve already seen Lam’s next-year EPS estimates gain more than 27% over the past 90 days.
Microchp Technology is a manufacturer of microcontroller, memory, and analog chips. The company is a leader in several IoT-related fields, including automotive and wireless connectivity. MCHP shares have gained more than 50% over the past year, but this stock could be poised to break even higher given the right catalyst, and might have just that.
Indeed, last month, the company upped its sales and EPS guidance for 1Q18, sending shares soaring. Furthermore, our current consensus estimates are calling for EPS growth of 26% and revenue growth of 12% this fiscal year. It’s also important to note that some of Microchip’s other key metrics, including its cash flow growth of 57% and RoE of 24%, are significantly better than their respective industry averages.
Micron is one of the leading worldwide providers of semiconductor memory solutions. The company’s memory solutions are marketed towards customers in a variety of industries, including computer manufacturing, consumer electronics, and telecommunications.
Micron’s revenues in the most recent quarter jumped 92.1% on a year-over-year basis to $5.566 billion and surpassed the Zacks Consensus Estimate of $5.370 billion. The year-over-year increase was primarily due to strong DRAM pricing environment and favorable product mix. This is also a rare value pick in the tech space, with an impressive P/E of 7.38, as well as a P/S of 1.67 and a PEG of 0.74.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
3 Strong Buy Semiconductor Stocks to Consider Now
With several interesting trends like the Internet of Things and artificial intelligence on the rise, it is an exciting time to be investing in the technology sector. What’s more, it is also a profitable time to be a tech-focused investor, as this space has been among the strongest performing sectors all year.
And while the behemoths like Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) may hog all the headlines, it’s really been the companies powering their technologies—the semiconductor manufacturers—that have had a strong year on the markets.
Indeed, as our Computer and Technology sector has gained nearly 13% year-to-date, semiconductor companies have been a driving factor behind its growth. The aforementioned emerging tech trends have created new consumer demand, and the semiconductor makers are delivering.
Luckily, the proven Zacks stock picking methods are effective across all industries. Check out these Zacks Rank #1 (Strong Buy) semiconductor stocks right now:
1. Lam Research Corporation (LRCX - Free Report)
Lam Research is a designer and manufacturer of semiconductor processing equipment used in the fabrication of integrated circuits. The company is recognized as a leading supplier of front-end wafer processing equipment to the worldwide semiconductor industry.
In its latest report, Lam posted earnings of $2.80 per share and revenue of $2.15 billion, beating our respective consensus estimates of $2.54 and $2.13 billion. The company will wrap up its fiscal year in the current quarter, and our consensus estimates call for full-year totals to mark EPS growth of 57% and sales growth of 36%. Looking ahead, we’ve already seen Lam’s next-year EPS estimates gain more than 27% over the past 90 days.
2. Microchip Technology (MCHP - Free Report)
Microchp Technology is a manufacturer of microcontroller, memory, and analog chips. The company is a leader in several IoT-related fields, including automotive and wireless connectivity. MCHP shares have gained more than 50% over the past year, but this stock could be poised to break even higher given the right catalyst, and might have just that.
Indeed, last month, the company upped its sales and EPS guidance for 1Q18, sending shares soaring. Furthermore, our current consensus estimates are calling for EPS growth of 26% and revenue growth of 12% this fiscal year. It’s also important to note that some of Microchip’s other key metrics, including its cash flow growth of 57% and RoE of 24%, are significantly better than their respective industry averages.
3. Micron Technology (MU - Free Report)
Micron is one of the leading worldwide providers of semiconductor memory solutions. The company’s memory solutions are marketed towards customers in a variety of industries, including computer manufacturing, consumer electronics, and telecommunications.
Micron’s revenues in the most recent quarter jumped 92.1% on a year-over-year basis to $5.566 billion and surpassed the Zacks Consensus Estimate of $5.370 billion. The year-over-year increase was primarily due to strong DRAM pricing environment and favorable product mix. This is also a rare value pick in the tech space, with an impressive P/E of 7.38, as well as a P/S of 1.67 and a PEG of 0.74.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think. See This Ticker Free >>