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Why Investors Should Buy Applied Materials (AMAT) Right Now
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A successful portfolio manager understands the importance of adding well-performing stocks at the right time. Indicators of a stock’s bullish run include a rise in share price and strong fundamentals.
Applied Materials, Inc. (AMAT - Free Report) is one such technology stock which has performed well so far this year and has the potential to carry the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, its time you add the stock to your portfolio.
Let’s delve deeper into the factors that make this stock an attractive investment option.
What Makes Applied Materials an Attractive Pick?
An Outperformer: Applied Materials has outperformed the industry in the year-to-date period. The stock has returned approximately 37.3% during this period compared with roughly 36.8% growth recorded by the industry.
Solid Rank & VGM Score: Applied Materials currently sports a Zacks Rank #1 (Strong Buy) and a Value Growth Momentum Score (VGM Score) of ‘A’. Our research shows that stocks with a VGM Score of ‘A’ or ‘B’ combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Upward Estimate Revision: Estimates for the current fiscal as well as fiscal 2018 have moved north over the past 30 days, reflecting analysts’ confidence in Applied Materials. During this period, the Zacks Consensus Estimate for fiscal 2017 increased around 3% to $3.19. The Zacks Consensus Estimate for fiscal 2018 also inched up 3.4% over the same timeframe to $3.39.
Positive Earnings Surprise History: Applied Materials has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, delivering an average positive earnings surprise of 2.7%.
Healthy Growth Prospects: The Zacks Consensus Estimate for fiscal 2017 earnings is currently pegged at $3.19, highlighting an anticipated year-over-year growth of 82.2%. Moreover, earnings are expected to register 6.3% growth in fiscal 2018. The stock has long-term expected earnings per share growth rate of 16.6%.
Growth Drivers: Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. The company’s inflection-focused innovation strategy is the main growth driver.
Applied Materials has an impressive product line and management has stepped up investments to prepare for the ongoing transition to larger wafer sizes and smaller process nodes. The demand for its products and services is expected to remain strong in the near future, driven by continuous adoption of new technologies by semiconductor and display customers. The company also sees significant opportunities in the patterning market.
Additionally, the company remains strongly positioned in China where it foresees growth in semiconductor orders. The decision of the Chinese government to reduce its semiconductor imports by building domestic capabilities is likely to bolster Applied Materials’ revenues in the long run.
Lam Research delivered a positive earnings surprise of 4.44%, on average, in the trailing four quarters.
Alibaba Group Holding Limited delivered a positive earnings surprise of 12.16%, on average, in the trailing four quarters.
PetMed Express delivered a positive earnings surprise of 10.78%, on average, in the trailing four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Why Investors Should Buy Applied Materials (AMAT) Right Now
A successful portfolio manager understands the importance of adding well-performing stocks at the right time. Indicators of a stock’s bullish run include a rise in share price and strong fundamentals.
Applied Materials, Inc. (AMAT - Free Report) is one such technology stock which has performed well so far this year and has the potential to carry the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, its time you add the stock to your portfolio.
Let’s delve deeper into the factors that make this stock an attractive investment option.
What Makes Applied Materials an Attractive Pick?
An Outperformer: Applied Materials has outperformed the industry in the year-to-date period. The stock has returned approximately 37.3% during this period compared with roughly 36.8% growth recorded by the industry.
Solid Rank & VGM Score: Applied Materials currently sports a Zacks Rank #1 (Strong Buy) and a Value Growth Momentum Score (VGM Score) of ‘A’. Our research shows that stocks with a VGM Score of ‘A’ or ‘B’ combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Upward Estimate Revision: Estimates for the current fiscal as well as fiscal 2018 have moved north over the past 30 days, reflecting analysts’ confidence in Applied Materials. During this period, the Zacks Consensus Estimate for fiscal 2017 increased around 3% to $3.19. The Zacks Consensus Estimate for fiscal 2018 also inched up 3.4% over the same timeframe to $3.39.
Applied Materials, Inc. Price and Consensus
Applied Materials, Inc. Price and Consensus | Applied Materials, Inc. Quote
Positive Earnings Surprise History: Applied Materials has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, delivering an average positive earnings surprise of 2.7%.
Healthy Growth Prospects: The Zacks Consensus Estimate for fiscal 2017 earnings is currently pegged at $3.19, highlighting an anticipated year-over-year growth of 82.2%. Moreover, earnings are expected to register 6.3% growth in fiscal 2018. The stock has long-term expected earnings per share growth rate of 16.6%.
Growth Drivers: Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. The company’s inflection-focused innovation strategy is the main growth driver.
Applied Materials has an impressive product line and management has stepped up investments to prepare for the ongoing transition to larger wafer sizes and smaller process nodes. The demand for its products and services is expected to remain strong in the near future, driven by continuous adoption of new technologies by semiconductor and display customers. The company also sees significant opportunities in the patterning market.
Additionally, the company remains strongly positioned in China where it foresees growth in semiconductor orders. The decision of the Chinese government to reduce its semiconductor imports by building domestic capabilities is likely to bolster Applied Materials’ revenues in the long run.
Stocks to Consider
A few other top-ranked stocks in the broader technology sector are Lam Research Corporation (LRCX - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Alibaba Group Holding Limited (BABA - Free Report) and PetMed Express, Inc. (PETS - Free Report) , sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lam Research delivered a positive earnings surprise of 4.44%, on average, in the trailing four quarters.
Alibaba Group Holding Limited delivered a positive earnings surprise of 12.16%, on average, in the trailing four quarters.
PetMed Express delivered a positive earnings surprise of 10.78%, on average, in the trailing four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>