Electronics-Miscellaneous Components is mostly a small-cap industry. It holds 35 companies. This large number of firms makes the niche a lively, diverse and complex environment.
To better understand products in it, electrical engineers classify components as active, passive or electromechanical.
- Active components rely on a source of energy and usually inject power into a circuit.A battery is a one example. Semiconductors are the largest group of active components. Displays are here (LED, LCD). This group also includes amplifying components like transistors.
- Passive components can’t supply energy. Resistors and capacitors and antennas fall here.
- Electromechanical components carry out electrical operations. They use moving parts. Think of power cords and switches.
There is plenty more to explore. Learn by clicking through a number of business descriptions on Zacks.com.
And it is a HOT stock space. The industry currently has 5 Zacks Rank #1 (STRONG BUY) stocks and 9 Zacks Rank #2 (BUY) stocks. Those 14 stocks are the place to focus your attention.
Rewards are materializing for shareholders, too. The YTD return of the S&P 500 stands at +12.4%. The Electronics Components industry has returned +26.3%.
Why that outperformance? As semiconductor chipmakers and downstream electronics businesses grow volume smartly, so do suppliers of components to them.
The current Zacks Industry Rank is #28 out of 265 (top 11%), having risen from #35 last week. A top industry score, particularly on an industry with this many firms, is a solid niche to mine for great stocks.
In recent weeks -- a time leading into the coming third quarter earnings season -- estimate revisions have been rising across the board. In this time, 10 covering analysts raised estimates on companies. Only 1 lowered them.
Also, there seems to be a nascent trading rotation into small-cap stocks. These indexes haven’t been the place to be for some time. That may be changing.
As this small-cap momentum trend gets further underway, play names with top Value scores and top Zacks Ranks.
With plenty of overlooked companies, don’t chase overvalued stocks!
Three Top Electronics-Miscellaneous Components Stocks I Saw--
(1) IEC Electronics (IEC - Free Report) ): This is a micro-cap stock at $51 million and a $5 a share price. The next earnings report is December 13th. The Zacks Value score is A and the VGM score is B.
IEC Electronics Corp. is a full service, ISO 9001 and 9002 certified, contract manufacturer employing state-of-the-art production utilizing both surface mount and pin-through-hole technology.
IEC offers its customers a wide range of manufacturing and management services, on either a turnkey or consignment basis, including design prototyping, material procurement and control, concurrent engineering services, manufacturing and test engineering support, statistical quality assurance and complete resource management.
(2) Kemet Corp. (KEM - Free Report) : This is a small-cap stock at $942 million and a $19.40 share price. The next earnings report is November 7th. The Zacks Value score is A and the VGM score is A.
Kemet Corporation and its subsidiaries is the world's largest manufacturer of solid tantalum capacitors and one of the world's largest manufacturer of multilayer ceramic capacitors.
According to industry sources, tantalum and ceramic capacitors are the two fastest growing sectors of the United States capacitor industry. Capacitors are electronic components that store, filter and regulate electrical energy and current flow and are one of the essential passive components used on circuit boards.
(3) Stoneridge Inc. (SRI - Free Report) : This is a small-cap stock at $524 million and a $19.50 share price. The next earnings report is October 26th. The Zacks Value score is A and the VGM score is B.
Stoneridge Inc. is an independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems for the automotive, medium and heavy-duty truck, and agricultural vehicle markets.
Their products interface with a vehicle's mechanical and electrical systems to activate equipment and accessories, display and monitor vehicle performance, and control and distribute electrical power and signals.