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Any large and complex S&P500 sector — offering nearly double the average profit margin — is always worth investigating.
I. U.S. Markets
The Info Tech sector remains a key 2023 returns source.
In turn, using the Price to Sales Forward 12-month stock valuation ratio is helpful to identify top Computer and Technology stocks.
The sharp idea: Savvy stock traders will pay up for next year’s sales growth.
So, in the next two charts, the highest Price to Sales F12M ratio picks in each chart are worth noting.
In a first chart, I show you the P/S F12M ratios for the Computer-Office Equipment (top), Software Services (middle), & Electronics Semis (bottom) sub-industry names.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Want six bullish stock-picking Computers & Technology sub-industry ideas here?
Tech mega-caps AAPL, MSFT and NVDA come from the left-hand side charts.
NTAP, ADBE and ADI come from the right-hand side.
In a second chart, I show you the top Electronics (top), Misc. Tech. (Middle) & Telco Services (bottom) sub-industry names.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Want seven more bullish stock-picking Computers & Technology sub-industry picks?
KLAC, ASML and TMU are found along the right-hand side. Top chip tickers! HOCPY, PKI and WAT and AMX are found along the left-hand side.
While the San Francisco Bay Area is home to Silicon Valley, the Boston Area is home to “Scientific Instrument Alley”:
These are great stock-picking names to know about
Consult industry ranking tables on Zacks.com for more top scientific instrument names, hailing from this Northeast – Harvard/M.I.T. fed area
Two of these companies hail from a notably scientific instrument industry cluster found outside of Boston, MA.
(1) Headquartered in Waltham, MA, PerkinElmer provides scientific instruments, consumables, and services to pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide.
For the Diagnostics market, the company offers products that are used to detect genetic disorders from pre-conception to early childhood.
(2) Milford, MA-based, Waters (WAT - Free Report) is an analytical instrument manufacturer and offers practical and sustainable products for laboratory-dependent organizations.
Moreover, Waters provides analytical workflow solutions based on mass spectrometry (MS), liquid chromatography (LC) and thermal analysis technologies.
Finally, Hoya Corp. (HOCPY - Free Report) is a specialty manufacturer of optical glass.
Its info tech products include mask blanks and photomasks for semiconductor and LCD, glass memory disks, optical lenses, laser equipment and glass for electronic materials.
Hoya Corp. is based in Tokyo, Japan.
Now, let’s move on -- to top-down stock selection-- for this month of May.
II. Zacks May 2023 Sector/Industry/Company Telescope
The consumer is alive and well, according to reporting S&P500 companies.
Consumer Discretionary and Consumer Staples rose to Very Attractive from Market Weight.
Industrials stayed on as a Very Attractive sector. Lots of hot industries here. The Health Care sector stayed at Very Attractive too, but Medical Products and Drugs now lead.
Materials, and the Energy sector remain grouped at Market Weight.
Financials at Market Weight. Insurance and Major Banks lead.Communication Services is at Market Weight
Utilities fell to Unattractive, showing typical cyclical placement. Utilities-Telephone looks the best
(1) Consumer Discretionary rose to Very Attractive from Market Weight. Apparel, Publishing, Autos/Tires/Trucks, Leisure & Home Furnishings are best.
Zacks #1 Rank (STRONG BUY): The Madison Square Garden Company (MSGS - Free Report) )
(2) Consumer Staples rose to Very Attractive from Market Weight. Soaps & Cosmetics,
Image: Bigstock
Finding Top Computer & Tech Stocks: Zacks May Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full May Market Strategy report To access the full PDF, click here.
Any large and complex S&P500 sector — offering nearly double the average profit margin — is always worth investigating.
I. U.S. Markets
The Info Tech sector remains a key 2023 returns source.
In turn, using the Price to Sales Forward 12-month stock valuation ratio is helpful to identify top Computer and Technology stocks.
The sharp idea: Savvy stock traders will pay up for next year’s sales growth.
So, in the next two charts, the highest Price to Sales F12M ratio picks in each chart are worth noting.
In a first chart, I show you the P/S F12M ratios for the Computer-Office Equipment (top), Software Services (middle), & Electronics Semis (bottom) sub-industry names.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Want six bullish stock-picking Computers & Technology sub-industry ideas here?
In a second chart, I show you the top Electronics (top), Misc. Tech. (Middle) & Telco Services (bottom) sub-industry names.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Want seven more bullish stock-picking Computers & Technology sub-industry picks?
KLAC, ASML and TMU are found along the right-hand side. Top chip tickers!
HOCPY, PKI and WAT and AMX are found along the left-hand side.
While the San Francisco Bay Area is home to Silicon Valley, the Boston Area is home to “Scientific Instrument Alley”:
Two of these companies hail from a notably scientific instrument industry cluster found outside of Boston, MA.
(1) Headquartered in Waltham, MA, PerkinElmer provides scientific instruments, consumables, and services to pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide.
For the Diagnostics market, the company offers products that are used to detect genetic disorders from pre-conception to early childhood.
(2) Milford, MA-based, Waters (WAT - Free Report) is an analytical instrument manufacturer and offers practical and sustainable products for laboratory-dependent organizations.
Moreover, Waters provides analytical workflow solutions based on mass spectrometry (MS), liquid chromatography (LC) and thermal analysis technologies.
Finally, Hoya Corp. (HOCPY - Free Report) is a specialty manufacturer of optical glass.
Its info tech products include mask blanks and photomasks for semiconductor and LCD, glass memory disks, optical lenses, laser equipment and glass for electronic materials.
Hoya Corp. is based in Tokyo, Japan.
Now, let’s move on -- to top-down stock selection-- for this month of May.
II. Zacks May 2023 Sector/Industry/Company Telescope
The consumer is alive and well, according to reporting S&P500 companies.
Consumer Discretionary and Consumer Staples rose to Very Attractive from Market Weight.
Industrials stayed on as a Very Attractive sector. Lots of hot industries here. The Health Care sector stayed at Very Attractive too, but Medical Products and Drugs now lead.
Materials, and the Energy sector remain grouped at Market Weight.
Financials at Market Weight. Insurance and Major Banks lead.Communication Services is at Market Weight
Utilities fell to Unattractive, showing typical cyclical placement. Utilities-Telephone looks the best
(1) Consumer Discretionary rose to Very Attractive from Market Weight. Apparel, Publishing, Autos/Tires/Trucks, Leisure & Home Furnishings are best.
Zacks #1 Rank (STRONG BUY): The Madison Square Garden Company (MSGS - Free Report) )
(2) Consumer Staples rose to Very Attractive from Market Weight. Soaps & Cosmetics,
Zacks #1 Rank (STRONG BUY): The Kroger Co. (KR - Free Report) )
(3) Industrials stayed Very Attractive. Construction-Building Services, Industrial
Products-Services, Machinery-Electrical, and Transport-Air look hot.
Zacks #1 Rank (STRONG BUY): FedEx (FDX - Free Report) )
(4) Health Care stayed Very Attractive. Medical Products and Drugs lead.
(5) Info Tech fell to Attractive from Very Attractive. Semis fell one notch to Attractive.
(6) Materials rise to Attractive from Market Weight. Steel looks best. Building Products are good too.
(7) Energy stays at Market Weight. Oil Misc. and Coal look best.
(8) Financials stays at Market Weight. Insurance and Major Banks are at the top.
(9) Communications Services stays at Market Weight.
(10) Utilities fall to Unattractive from Market Weight. Utilities-Telephone looks the best.
III. Conclusion
Computer & Technology sector picks will remain interesting.
Particularly, those with:
These types of picks can durably be a strong choice -- for either a trade or investment.
Enjoy the rest of the May 2023 Zacks Market Strategy report.
Warm Regards,
John Blank
Zacks Chief Equity Strategist and Economist