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5 Value Stocks to Buy as Technology Carnage Grips Market
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Markets are suffering and the tech sector is at the helm of the carnage with share prices of all major players taking a beating. Needless to say, tech stocks have seen a sharp decline since the beginning of last week with Facebook, Inc. leading the rout after it was accused of a data breach.
However, Monday saw tech stocks slightly rebounding but the sector nosedived again on Tuesday with most major companies closing in the red. Shares of NVIDIA Corporation (NVDA - Free Report) , Microsoft Corporation (MSFT - Free Report) , Apple Inc. (AAPL - Free Report) and Tesla, Inc. (TSLA - Free Report) plunged, indicating that volatility in the market may continue for some time. Strategists believe that tech stocks, which have been driving the markets’ bull run for quite some time, are witnessing a rotation that was possibly long overdue.
Market volatility has heightened because of changes in government policies that have heightened investor concerns, leading to selloffs. However, the fundamentals which powered the ascent of tech stocks remain firmly in place. This is why it makes good sense to buy sector plays on the dip ahead of their next rebound.
Facebook Rattles the Tech Sector
Facebook’s data misuse scandal has taken the shape of a global controversy with the company having erased market capitalization by $100 billion in just a week. Shares of the social media giant lost4.9% once again on Tuesday, after Bank of America Merrill Lynch reduced its price target on the stock for the second time in five days.
Further, CEO Mark Zuckerberg said that he might have to give a testimony about Facebook’s data-use standards. Although Zuckerberg is going all out to salvage the fast-eroding image of his company, which includes an apology in the form of full-page ads in 10 newspapers in the United States and the U.K., it perhaps came a bit too late.
Naturally, the Facebook fiasco is taking its toll on other tech and Internet companies, with the entire sector suffering on fears of a regulatory clampdown on major players. Naturally, this has instigated panic among investors.
NVIDIA, Tesla, Microsoft, Apple Take a Beating
The Nasdaq declined 2.9% on Tuesday, with shares of NVIDIA suffering a stiff reverse. Shares of the chipmaker declined 7.8% on reports that it is suspending all its self-driving tests. This decision comes after Uber’s driverless car struck down a pedestrian in Arizonalast week. The incident has raised questions on the credibility and future of autonomous vehicles.
Meanwhile, shares of Tesla declined 8.2% following news that the U.S. National Transportation Safety Board was carrying out a field investigation into a fatal crash involving a Tesla vehicle, last week, in California. Further, shares of Microsoft and Apple slid 4.6% and 2.6%, respectively. However, there are quite a few other reasons behind this erratic market behavior.
Analysts believe that markets do not handle transitions well and are juggling several changes right now. Markets are still adjusting to Fed Chairman Powell at a time when policy is tightening with rate hikes. At the same time, the country is moving toward a protectionist trade policy with President Donald Trump first firm on imposing heavy-duty tariffs on imports from China and then having a more relaxed stance with waivers on the table to stave off a trade war. Naturally, these developments have given rise to volatility and tech stocks are suffering.
Our Choice
Given the bad phase for the tech stocks amid market volatility, Facebook scandal, the Fed’s recent rate hike and looming fears of a trade war between the United States and China, investor concerns are only natural. However, this sector has been driving the markets this year and was one of the significant beneficiaries of a roaring rally last year. So it will not be too ambitious to expect a rebound in the near term.
It does make sense now to buy value stocks from the technology space that could prove to be lucrative finds, going forward. Our selection is also backed by a good Value Score and a Zacks Rank #1 (Strong Buy) and 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
We narrowed down our choices with the help of our new Style Score System.
Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 or 2 offer the best opportunities in the value-investing space.
Kulicke and Soffa Industries, Inc. (KLIC - Free Report) is a leading provider of semiconductor packaging and electronic assembly solutions supporting the global automotive, consumer, communications, computing and industrial segments.
Kulicke and Soffa has a Zacks Rank #1 and Value Score of B. The forward price-to-earnings ratio (P/E) for the current financial year (F1) 11.04, lower than the industry average of 19.03. It has a PEG ratio of 0.92, lower than the industry average of 1.69.
Smart Global Holdings Inc. (SGH - Free Report) is a designer, manufacturer and supplier of electronic subsystems to OEMs.
Smart Global Holdings has a Zacks Rank #1 and Value Score of A. Its P/E ratio for the current financial year (F1) is 8.8, lower than the industry average of 17. It has a PEG ratio of 0.59, lower than the industry average of 1.32.
Arrow Electronics, Inc. (ARW - Free Report) is the world's largest distributor of electronic components and computer products to industrial and commercial customers.
Arrow Electronics has a Zacks Rank #2 and Value Score of B. Its P/E ratio for the current financial year (F1) is 9, lower than the industry average of 11.8. It has a PEG ratio of 0.90, lower than the industry average of 1.23.
Lam Research Corporation (LRCX - Free Report) enables its customers to shape the future of technology by providing market-leading equipment and services for semiconductor wafer processing.
Lam Researchhas a Zacks Rank #2 and Value Score of B. Its P/E ratio for the current financial year (F1) is 12.1, lower than the industry average of 12.6. It has a PEG ratio of 0.68, lower than the industry average of 0.95.
Methode Electronics, Inc. (MEI - Free Report) is a global manufacturer of electronic components and subsystems.
Methode Electronics has a Zacks Rank #2 and Value Score of A. Its P/E ratio for the current financial year (F1) is 14.3, lower than the industry average of 19.5. It has a PEG ratio of 0.95, lower than the industry average of 1.73.
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.
Image: Bigstock
5 Value Stocks to Buy as Technology Carnage Grips Market
Markets are suffering and the tech sector is at the helm of the carnage with share prices of all major players taking a beating. Needless to say, tech stocks have seen a sharp decline since the beginning of last week with Facebook, Inc. leading the rout after it was accused of a data breach.
However, Monday saw tech stocks slightly rebounding but the sector nosedived again on Tuesday with most major companies closing in the red. Shares of NVIDIA Corporation (NVDA - Free Report) , Microsoft Corporation (MSFT - Free Report) , Apple Inc. (AAPL - Free Report) and Tesla, Inc. (TSLA - Free Report) plunged, indicating that volatility in the market may continue for some time. Strategists believe that tech stocks, which have been driving the markets’ bull run for quite some time, are witnessing a rotation that was possibly long overdue.
Market volatility has heightened because of changes in government policies that have heightened investor concerns, leading to selloffs. However, the fundamentals which powered the ascent of tech stocks remain firmly in place. This is why it makes good sense to buy sector plays on the dip ahead of their next rebound.
Facebook Rattles the Tech Sector
Facebook’s data misuse scandal has taken the shape of a global controversy with the company having erased market capitalization by $100 billion in just a week. Shares of the social media giant lost4.9% once again on Tuesday, after Bank of America Merrill Lynch reduced its price target on the stock for the second time in five days.
Further, CEO Mark Zuckerberg said that he might have to give a testimony about Facebook’s data-use standards. Although Zuckerberg is going all out to salvage the fast-eroding image of his company, which includes an apology in the form of full-page ads in 10 newspapers in the United States and the U.K., it perhaps came a bit too late.
Naturally, the Facebook fiasco is taking its toll on other tech and Internet companies, with the entire sector suffering on fears of a regulatory clampdown on major players. Naturally, this has instigated panic among investors.
NVIDIA, Tesla, Microsoft, Apple Take a Beating
The Nasdaq declined 2.9% on Tuesday, with shares of NVIDIA suffering a stiff reverse. Shares of the chipmaker declined 7.8% on reports that it is suspending all its self-driving tests. This decision comes after Uber’s driverless car struck down a pedestrian in Arizonalast week. The incident has raised questions on the credibility and future of autonomous vehicles.
Meanwhile, shares of Tesla declined 8.2% following news that the U.S. National Transportation Safety Board was carrying out a field investigation into a fatal crash involving a Tesla vehicle, last week, in California. Further, shares of Microsoft and Apple slid 4.6% and 2.6%, respectively. However, there are quite a few other reasons behind this erratic market behavior.
Analysts believe that markets do not handle transitions well and are juggling several changes right now. Markets are still adjusting to Fed Chairman Powell at a time when policy is tightening with rate hikes. At the same time, the country is moving toward a protectionist trade policy with President Donald Trump first firm on imposing heavy-duty tariffs on imports from China and then having a more relaxed stance with waivers on the table to stave off a trade war. Naturally, these developments have given rise to volatility and tech stocks are suffering.
Our Choice
Given the bad phase for the tech stocks amid market volatility, Facebook scandal, the Fed’s recent rate hike and looming fears of a trade war between the United States and China, investor concerns are only natural. However, this sector has been driving the markets this year and was one of the significant beneficiaries of a roaring rally last year. So it will not be too ambitious to expect a rebound in the near term.
It does make sense now to buy value stocks from the technology space that could prove to be lucrative finds, going forward. Our selection is also backed by a good Value Score and a Zacks Rank #1 (Strong Buy) and 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
We narrowed down our choices with the help of our new Style Score System.
Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 or 2 offer the best opportunities in the value-investing space.
Kulicke and Soffa Industries, Inc. (KLIC - Free Report) is a leading provider of semiconductor packaging and electronic assembly solutions supporting the global automotive, consumer, communications, computing and industrial segments.
Kulicke and Soffa has a Zacks Rank #1 and Value Score of B. The forward price-to-earnings ratio (P/E) for the current financial year (F1) 11.04, lower than the industry average of 19.03. It has a PEG ratio of 0.92, lower than the industry average of 1.69.
Smart Global Holdings Inc. (SGH - Free Report) is a designer, manufacturer and supplier of electronic subsystems to OEMs.
Smart Global Holdings has a Zacks Rank #1 and Value Score of A. Its P/E ratio for the current financial year (F1) is 8.8, lower than the industry average of 17. It has a PEG ratio of 0.59, lower than the industry average of 1.32.
Arrow Electronics, Inc. (ARW - Free Report) is the world's largest distributor of electronic components and computer products to industrial and commercial customers.
Arrow Electronics has a Zacks Rank #2 and Value Score of B. Its P/E ratio for the current financial year (F1) is 9, lower than the industry average of 11.8. It has a PEG ratio of 0.90, lower than the industry average of 1.23.
Lam Research Corporation (LRCX - Free Report) enables its customers to shape the future of technology by providing market-leading equipment and services for semiconductor wafer processing.
Lam Researchhas a Zacks Rank #2 and Value Score of B. Its P/E ratio for the current financial year (F1) is 12.1, lower than the industry average of 12.6. It has a PEG ratio of 0.68, lower than the industry average of 0.95.
Methode Electronics, Inc. (MEI - Free Report) is a global manufacturer of electronic components and subsystems.
Methode Electronics has a Zacks Rank #2 and Value Score of A. Its P/E ratio for the current financial year (F1) is 14.3, lower than the industry average of 19.5. It has a PEG ratio of 0.95, lower than the industry average of 1.73.
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.
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