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3 Bargain Tech Stocks to Buy Before Recession Fears Subside
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The broader equity market has been highly volatile so far this year on increasing pessimism around the possibility of a recession amid rising interest rates, soaring inflation and supply-chain issues. The ongoing Russia-Ukraine war has further increased worries about a global economic recovery.
Year to date (YTD), the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 8.5%, 33.8% and 19.7%, respectively. The global economy has been going through a massive slowdown due to the macroeconomic and geopolitical environment.
Technology stocks are among the most battered sector amid the broader market sell-off this year so far. Technology Select Sector SPDR Fund, which seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Technology Select Sector Index, has lost approximately 29% of its value YTD.
However, this sell-off in the broader equity market has led to a massive correction in several technology companies’ stock prices, which were considered to be widely overvalued at the sector’s peak in 2021. With this correction, several tech stocks are currently trading way below their 52-week high and at attractive valuations as well, despite their strong fundamentals.
In our opinion, Microchip Technology (MCHP - Free Report) , ePlus (PLUS - Free Report) and GlobalFoundries (GFS - Free Report) are among the most beaten-down stocks in the technology space. Given the strength of their fundamentals and solid prospects, it seems wise to add these stocks to your portfolio. These are among the bargain stocks that are poised for a turnaround in 2023.
3 Prominent Picks
Microchip Technology: The company develops and manufactures microcontrollers, memory and analog and interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks.
Microchip is riding on consistent strength in its analog and microcontroller businesses. The company’s dominance in 8,16 and 32-bit microcontrollers is driving top-line growth. Strategic acquisitions like Microsemi and Atmel have expanded the product portfolio.
Microchip has a market cap of $38.5 billion and a Value Score of B. The Zacks Consensus Estimate for fiscal 2023 sales and EPS suggests growth of 22.2% and 28.9%, respectively, from the year-ago period. Shares of this Zacks Rank #2 (Buy) company have plunged 20.7% YTD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microchip Technology Incorporated Price and Consensus
ePlus: This Herndon, VA-based company enables organizations to optimize their IT infrastructure and supply-chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software and patented business methods.
The company is benefiting from the increasing demand for work-from-home hardware and software, including PCs, tablets, connectivity, collaboration, and security products amid the rising hybrid working trend. Apart from this, the company’s strategy of acquiring regional solution providers is helping it grow across the higher-margin IT services market.
ePlus currently carries a Zacks Rank #2 and has a Value Score of A. The Zacks Consensus Estimate for fiscal 2023 sales and EPS suggests growth of 6.1% and 1.4%, respectively, from the year-ago period. This $1.2 billion worth of market cap stock has lost 18.8% of its value YTD.
GlobalFoundries: The Malta, NY-based manufacturer of a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units and microelectromechanical systems, continues to benefit from its position in the global semiconductor supply chain.
This presently Zacks Rank #2 player is positioned well to capitalize on strengthening demand for pervasive semiconductor solutions. Its expanding global manufacturing footprint remains another major positive.
This $29.2 billion worth market cap stock has a Value Score of B. The Zacks Consensus Estimate for 2022 revenues suggests year-over-year growth of 22.7%. The consensus mark for earnings is pegged at $3.01 per share, indicating strong improvement from the year-ago quarter’s loss of 5 cents per share. Shares of this Zacks Rank #2 company have declined 17.4% YTD.
Image: Bigstock
3 Bargain Tech Stocks to Buy Before Recession Fears Subside
The broader equity market has been highly volatile so far this year on increasing pessimism around the possibility of a recession amid rising interest rates, soaring inflation and supply-chain issues. The ongoing Russia-Ukraine war has further increased worries about a global economic recovery.
Year to date (YTD), the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 8.5%, 33.8% and 19.7%, respectively. The global economy has been going through a massive slowdown due to the macroeconomic and geopolitical environment.
Technology stocks are among the most battered sector amid the broader market sell-off this year so far. Technology Select Sector SPDR Fund, which seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Technology Select Sector Index, has lost approximately 29% of its value YTD.
However, this sell-off in the broader equity market has led to a massive correction in several technology companies’ stock prices, which were considered to be widely overvalued at the sector’s peak in 2021. With this correction, several tech stocks are currently trading way below their 52-week high and at attractive valuations as well, despite their strong fundamentals.
In our opinion, Microchip Technology (MCHP - Free Report) , ePlus (PLUS - Free Report) and GlobalFoundries (GFS - Free Report) are among the most beaten-down stocks in the technology space. Given the strength of their fundamentals and solid prospects, it seems wise to add these stocks to your portfolio. These are among the bargain stocks that are poised for a turnaround in 2023.
3 Prominent Picks
Microchip Technology: The company develops and manufactures microcontrollers, memory and analog and interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks.
Microchip is riding on consistent strength in its analog and microcontroller businesses. The company’s dominance in 8,16 and 32-bit microcontrollers is driving top-line growth. Strategic acquisitions like Microsemi and Atmel have expanded the product portfolio.
Microchip has a market cap of $38.5 billion and a Value Score of B. The Zacks Consensus Estimate for fiscal 2023 sales and EPS suggests growth of 22.2% and 28.9%, respectively, from the year-ago period. Shares of this Zacks Rank #2 (Buy) company have plunged 20.7% YTD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microchip Technology Incorporated Price and Consensus
Microchip Technology Incorporated price-consensus-chart | Microchip Technology Incorporated Quote
ePlus: This Herndon, VA-based company enables organizations to optimize their IT infrastructure and supply-chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software and patented business methods.
The company is benefiting from the increasing demand for work-from-home hardware and software, including PCs, tablets, connectivity, collaboration, and security products amid the rising hybrid working trend. Apart from this, the company’s strategy of acquiring regional solution providers is helping it grow across the higher-margin IT services market.
ePlus currently carries a Zacks Rank #2 and has a Value Score of A. The Zacks Consensus Estimate for fiscal 2023 sales and EPS suggests growth of 6.1% and 1.4%, respectively, from the year-ago period. This $1.2 billion worth of market cap stock has lost 18.8% of its value YTD.
ePlus inc. Price and Consensus
ePlus inc. price-consensus-chart | ePlus inc. Quote
GlobalFoundries: The Malta, NY-based manufacturer of a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units and microelectromechanical systems, continues to benefit from its position in the global semiconductor supply chain.
This presently Zacks Rank #2 player is positioned well to capitalize on strengthening demand for pervasive semiconductor solutions. Its expanding global manufacturing footprint remains another major positive.
This $29.2 billion worth market cap stock has a Value Score of B. The Zacks Consensus Estimate for 2022 revenues suggests year-over-year growth of 22.7%. The consensus mark for earnings is pegged at $3.01 per share, indicating strong improvement from the year-ago quarter’s loss of 5 cents per share. Shares of this Zacks Rank #2 company have declined 17.4% YTD.
GlobalFoundries Inc. Price and Consensus
GlobalFoundries Inc. price-consensus-chart | GlobalFoundries Inc. Quote