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Why You Should Add Advanced Energy (AEIS) to Your Portfolio

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Advanced Energy Industries Inc. (AEIS - Free Report) is currently one of the top-performing stocks in the technology sector. Markedly, an increase in share price and strong fundamentals signal its bullish run. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio right now.

The company has performed pretty well this year and has the potential to carry on the momentum in the near term as well.

Why an Attractive Pick?

Share Price Appreciation: A glimpse of its price trend shows that the stock has had an impressive run on the bourses year to date. Advanced Energy has rallied 33.7% compared with the S&P 500 market gain of 17.7%.

Solid Rank: Advanced Energy currently sports a Zacks Rank #1 (Strong Buy). Thus, the company appears to be a compelling investment proposition at the moment.

Northward Estimate Revisions: Five estimates for the current year have moved north over the past 60 days against no southward revision, reflecting analysts’ confidence in the company. Moreover, the Zacks Consensus Estimate for the current year has increased 17.5% over the same period. Also, the Zacks Consensus Estimate for 2021 has inched up 13.2% to $5.58.

Earnings Surprise History: Advanced Energy has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all the trailing four quarters, with an average earnings surprise of 38.1%.

Strong Prospects: The Zacks Consensus Estimate for 2020 earnings of $1.36 indicates year-over-year growth of 56.3%. Moreover, earnings are expected to grow 39.6% year over year in 2021.

Growth Drivers

Advanced Energy is poised to gain from strong momentum across semiconductor equipment, telecom and networking, industrial and medical, as well as data center verticals.

Particularly, solid demand for the company’s power supplies for medical applications amid growing clout of critical care medical devices is expected to contribute to the top line in 2021. Moreover, increasing investments in foundry/logic, complex 3D NAND devices, DRAM, and foundry and logic remains a tailwind for the company.

Also, strengthening momentum across hyperscale customers is benefiting Advanced Energy. Further, positive contributions from the Artesyn buyout are encouraging. Notably, the successful integration of Artesyn has generated significant synergies (roughly $30 million) and record accretion ($1 per share over the past four quarters).

Additionally, benefits from rapid 5G deployment and prospects in the data center market are encouraging.

Other Stocks to Consider

Other top-ranked stocks in the broader technology sector include The Trade Desk Inc. (TTD - Free Report) , Dropbox, Inc. (DBX - Free Report) and Inuvo, Inc. (INUV - Free Report) . While The Trade Desk sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for The Trade Desk, Dropbox, and Inuvo is currently projected at 25%, 40.9% and 30%, respectively.

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