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5 Best Tech Stocks for Momentum Investors Right Now
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After a highly volatile first half, the stock market is finally set for a gala finale to 2016 thanks to a rebounding U.S. economy evident by recently released economic data.
Post Brexit, the U.S. economy looks much stable. The second estimate for GDP shows that the U.S. economy improved 3.2% in the third quarter, faring better than the first estimate of 2.9% growth and the second-quarter marginal increase of 1.4%. Other evidences of this improvement include rise in Consumer Confidence Index, improved job market as well as the U.S. factory activity data.
The Consumer Confidence Index surged to 107.1 in November from October’s upward revised reading of 100.8, and is at its highest level in nine years. Further, unemployment rate trickled down to 4.6% last month from 4.9% in October, marking the lowest level reached in nine years.
The economy is further boosted by the recent U.S. factory activity data. The Institute for Supply Management (ISM) stated that the index of national factory rose to 53.2 in November from 51.9 in October. Non-manufacturing activity index jumped to 57.2 in November from October’s reading of 54.8 and reached the highest level since 58.3 recorded in Oct 2015.
The aforementioned economic data suggests that the U.S. economy has been able to rebound considerably since the last year. Considering the improving trends, the Fed recently increased interest rate from a range of 0.25–0.5% to 0.5–0.75%. This was the first rate hike in 2016 and the second in the last ten years. Further, the Fed expects three rate hikes next year, higher than the previously projected two rate hikes in September meeting.
2016 Market Performance
These positive data has boosted investors’ confidence. In the year-to-date (YTD) period, Dow Jones Industrial Average (DJI), NASDAQ Composite (IXIC) and S&P 500 (GSPC) gained 14.1%, 9% and 10.7%, respectively.
Among the various sectors, technology has remained one of the outperformers with Technology Select Sector SPDR ETF (XLK - Free Report) registering YTD and one-month return of 14.3% and 5.06%, respectively.
Launched in Dec 1998, XLK is a passively managed fund designed to deliver the returns of the U.S. technology stocks. The fund, before expenses, is expected to remain at par with the returns and characteristics of the S&P Technology Select Sector Index.
In view of these bullish sentiments, momentum investing can be a winning strategy for those looking for high returns in a short time. This is because the strategy focuses on hot stocks that have been gaining over the past few weeks or months.
Today, we’ve zeroed-in on some tech stocks using our premium screen “Momentum Style Score."
What's the Momentum Style Score?
The Momentum Style Score theory states that stocks that are going up will likely continue to do so in the near future. This score indicates the time to buy a stock that is likely to witness a share price rise. Nothing is more frustrating than watching a fundamentally sound or inexpensive stock remaining stagnant.
Momentum investors thus strongly believe “the trend is your friend,” which implies that stocks that are growing will continue to grow. They make short-term choices among stocks that are scaling up and sell them at the first sign of a downtrend. The basic idea is that once a trend is recognized, it is likely to retain that direction and not move against the flow.
Thus, gambling on momentum stocks might help investors earn higher returns in the short term. Nevertheless, investors should remember that this is a speculative strategy and not meant for the faint hearted.
Where to Put Your Money?
Finding the right momentum stocks is not easy due to market volatility, but if executed properly, momentum stocks can bring in hefty returns.
It is here that our new Style Score System can come in handy. The Zacks Momentum Style Score indicates when the timing is right to grab a stock and make the most of its momentum. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform others.
Here is the list of five best tech stocks for momentum investors right now:
Micron Technology Inc. (MU - Free Report) is one of the leading worldwide providers of semiconductor memory solutions. The stock carries a Zacks Rank #1 and has a Momentum Style Score of “A.”
The current-year earnings per share (EPS) estimate has been revised upward to $1.59 from $1.30 over the past 30 days. The EPS growth estimate for fiscal 2017 and 2018 are way higher than the respective industry averages. Also the stock has gained 43.7% YTD, outperforming the Zacks Categorized Electronics - Semiconductors industry average return of 31.3%.
ePlus inc. (PLUS - Free Report) , through its subsidiaries, offers enterprise supply management, leasing and financing solutions and IT products and services across the United States. The stock carries a Zacks Rank #1 and has a Momentum Style Score of “B.” You can see the complete list of today’s Zacks #1 Rank stocks here.
The current-year EPS estimate has been revised upward to $7.12 from $7.09 over the past 30 days. The EPS growth estimate of 14.7% for fiscal 2017 is much higher than the industry average of 4.8%. Also the stock has gained 24.1% YTD, outperforming the Zacks Categorized Business Software Services/ BPO industry’s average negative return of 5.9%.
Asure Software Inc. (ASUR - Free Report) , formerly Forgent Networks, Inc., is a provider of Web-based workforce management solutions. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “A.”
The current-year EPS estimate has been revised upward to 24 cents from 23 cents over the past 7 days. The long-term EPS growth estimate is 27.5%, compared with the Zacks Categorized Internet Services industry average of 25.5%. Also the company has outperformed the Internet Services industry on a YTD basis. Asure Software gained 100.9% YTD while the Internet Services industry gave a negative return of 9.9% over the same time frame.
EMCORE Corporation (EMKR - Free Report) offers a broad portfolio of compound semiconductor- based products for the broadband, fiber optic, satellite and terrestrial solar power markets. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “A.”
The current-year EPS estimate has been revised upward to 34 cents from 23 cents over the past 30 days. The EPS growth estimate for fiscal 2017 is 209.1%, compared with the industry average of 28.8%. Also the stock has gained 45.2% YTD, outperforming the Zacks Categorized Electronics - Manufacturing Machinery industry average return of 26.9%.
Texas Instruments Inc. (TXN - Free Report) is a global semiconductor company and one of the world's leading designers and suppliers of digital signal processors and analog integrated circuits, the engines driving the digitization of electronics. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “B.”
The current-year EPS estimate has been revised upward to $3.16 from $3.05 over the past 60 days. The long-term EPS growth estimate of 9.6% is higher than the industry average of 9.2%. Also the stock has gained 34.2% YTD, outperforming the Zacks Categorized Semiconductor-General industry average return of 28.6%.
Looking Ahead
The abovementioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks would yield strong returns for your portfolio in the short term.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
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5 Best Tech Stocks for Momentum Investors Right Now
After a highly volatile first half, the stock market is finally set for a gala finale to 2016 thanks to a rebounding U.S. economy evident by recently released economic data.
Post Brexit, the U.S. economy looks much stable. The second estimate for GDP shows that the U.S. economy improved 3.2% in the third quarter, faring better than the first estimate of 2.9% growth and the second-quarter marginal increase of 1.4%. Other evidences of this improvement include rise in Consumer Confidence Index, improved job market as well as the U.S. factory activity data.
The Consumer Confidence Index surged to 107.1 in November from October’s upward revised reading of 100.8, and is at its highest level in nine years. Further, unemployment rate trickled down to 4.6% last month from 4.9% in October, marking the lowest level reached in nine years.
The economy is further boosted by the recent U.S. factory activity data. The Institute for Supply Management (ISM) stated that the index of national factory rose to 53.2 in November from 51.9 in October. Non-manufacturing activity index jumped to 57.2 in November from October’s reading of 54.8 and reached the highest level since 58.3 recorded in Oct 2015.
The aforementioned economic data suggests that the U.S. economy has been able to rebound considerably since the last year. Considering the improving trends, the Fed recently increased interest rate from a range of 0.25–0.5% to 0.5–0.75%. This was the first rate hike in 2016 and the second in the last ten years. Further, the Fed expects three rate hikes next year, higher than the previously projected two rate hikes in September meeting.
2016 Market Performance
These positive data has boosted investors’ confidence. In the year-to-date (YTD) period, Dow Jones Industrial Average (DJI), NASDAQ Composite (IXIC) and S&P 500 (GSPC) gained 14.1%, 9% and 10.7%, respectively.
Among the various sectors, technology has remained one of the outperformers with Technology Select Sector SPDR ETF (XLK - Free Report) registering YTD and one-month return of 14.3% and 5.06%, respectively.
Launched in Dec 1998, XLK is a passively managed fund designed to deliver the returns of the U.S. technology stocks. The fund, before expenses, is expected to remain at par with the returns and characteristics of the S&P Technology Select Sector Index.
In view of these bullish sentiments, momentum investing can be a winning strategy for those looking for high returns in a short time. This is because the strategy focuses on hot stocks that have been gaining over the past few weeks or months.
Today, we’ve zeroed-in on some tech stocks using our premium screen “Momentum Style Score."
What's the Momentum Style Score?
The Momentum Style Score theory states that stocks that are going up will likely continue to do so in the near future. This score indicates the time to buy a stock that is likely to witness a share price rise. Nothing is more frustrating than watching a fundamentally sound or inexpensive stock remaining stagnant.
Momentum investors thus strongly believe “the trend is your friend,” which implies that stocks that are growing will continue to grow. They make short-term choices among stocks that are scaling up and sell them at the first sign of a downtrend. The basic idea is that once a trend is recognized, it is likely to retain that direction and not move against the flow.
Thus, gambling on momentum stocks might help investors earn higher returns in the short term. Nevertheless, investors should remember that this is a speculative strategy and not meant for the faint hearted.
Where to Put Your Money?
Finding the right momentum stocks is not easy due to market volatility, but if executed properly, momentum stocks can bring in hefty returns.
It is here that our new Style Score System can come in handy. The Zacks Momentum Style Score indicates when the timing is right to grab a stock and make the most of its momentum. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform others.
Here is the list of five best tech stocks for momentum investors right now:
Micron Technology Inc. (MU - Free Report) is one of the leading worldwide providers of semiconductor memory solutions. The stock carries a Zacks Rank #1 and has a Momentum Style Score of “A.”
The current-year earnings per share (EPS) estimate has been revised upward to $1.59 from $1.30 over the past 30 days. The EPS growth estimate for fiscal 2017 and 2018 are way higher than the respective industry averages. Also the stock has gained 43.7% YTD, outperforming the Zacks Categorized Electronics - Semiconductors industry average return of 31.3%.
ePlus inc. (PLUS - Free Report) , through its subsidiaries, offers enterprise supply management, leasing and financing solutions and IT products and services across the United States. The stock carries a Zacks Rank #1 and has a Momentum Style Score of “B.” You can see the complete list of today’s Zacks #1 Rank stocks here.
The current-year EPS estimate has been revised upward to $7.12 from $7.09 over the past 30 days. The EPS growth estimate of 14.7% for fiscal 2017 is much higher than the industry average of 4.8%. Also the stock has gained 24.1% YTD, outperforming the Zacks Categorized Business Software Services/ BPO industry’s average negative return of 5.9%.
Asure Software Inc. (ASUR - Free Report) , formerly Forgent Networks, Inc., is a provider of Web-based workforce management solutions. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “A.”
The current-year EPS estimate has been revised upward to 24 cents from 23 cents over the past 7 days. The long-term EPS growth estimate is 27.5%, compared with the Zacks Categorized Internet Services industry average of 25.5%. Also the company has outperformed the Internet Services industry on a YTD basis. Asure Software gained 100.9% YTD while the Internet Services industry gave a negative return of 9.9% over the same time frame.
EMCORE Corporation (EMKR - Free Report) offers a broad portfolio of compound semiconductor- based products for the broadband, fiber optic, satellite and terrestrial solar power markets. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “A.”
The current-year EPS estimate has been revised upward to 34 cents from 23 cents over the past 30 days. The EPS growth estimate for fiscal 2017 is 209.1%, compared with the industry average of 28.8%. Also the stock has gained 45.2% YTD, outperforming the Zacks Categorized Electronics - Manufacturing Machinery industry average return of 26.9%.
Texas Instruments Inc. (TXN - Free Report) is a global semiconductor company and one of the world's leading designers and suppliers of digital signal processors and analog integrated circuits, the engines driving the digitization of electronics. The stock carries a Zacks Rank #2 and has a Momentum Style Score of “B.”
The current-year EPS estimate has been revised upward to $3.16 from $3.05 over the past 60 days. The long-term EPS growth estimate of 9.6% is higher than the industry average of 9.2%. Also the stock has gained 34.2% YTD, outperforming the Zacks Categorized Semiconductor-General industry average return of 28.6%.
Looking Ahead
The abovementioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks would yield strong returns for your portfolio in the short term.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>