The information age has witnessed unencumbered growth of electronics, and it continues to evolve shaping every aspect of our future. Innovation is the key to survival and prosper in this industry, and the companies are leaving no stone unturned to capitalize on the growing popularity of complex devices with breakthrough research initiatives.
Rising demand in the consumer sector for connected appliances is acting as a key catalyst. Smart TVs with 8K resolution, bigger screens, higher capacity smartphones with advanced megapixel cameras, foldable smartphones, dual-screen laptops, high graphics performance gaming PCs and laptops, smart headphones, smart speakers, smart wearables and home security solutions reflect the evolution of consumer electronics and also sheds light on the path ahead.
Moreover, robust implementation of advanced driver assisted systems (ADAS) in autonomous cars, rapid adoption of cloud, IoT, wearables, drones, virtual reality/ augmented reality (VR/AR) devices, is fueling growth prospects of digitization in electronics manufacturing.
Growing proliferation of IoT techniques and demand for AI in emerging markets is transforming robotics, industrial automation, transportation systems, retail, healthcare, defense, banking and finance, aerospace, utility, among other sectors. The companies involved in developing the next-generation electronic devices are looking forward to carve out a niche in the fourth industrial revolution or Industry 4.0.
Further, ongoing technical advancement in the telecommunication sector backed by accelerated deployment of 5G technology and strong efforts toward modification in Internet infrastructure are acting as tailwinds.
Although high raw material costs owing to trade war tensions, rising freight expenses and volatility in commodity prices are deterrents in this domain, the electronics companies are stopping at nothing to prove their expertise.
Making the Right Choice
The immense prospects of the electronics industry make it difficult to pick the right stock. It is here that the Growth Style Score comes in handy. Our Growth Style Score condenses all the essential metrics from the company's financial statements to achieve a true sense of quality and sustainability of its growth.
Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) when combined with Growth Score of A or B offer the best investment opportunities in the growth investing space. You can see the complete list of today's Zacks #1 Rank stocks here.
We have zeroed in on four electronics stocks with the favorable combination. Moreover, each of the stocks has outperformed the S&P 500 as well as broader technology sector year to date despite the trade war concerns.
Year-to-Date Price Performance
4 Top Growth Picks
Hawthorne, CA-based, OSI Systems, Inc. (OSIS - Free Report) is benefiting from demand for its specialized electronic systems and components primarily facilitating applications in homeland security, healthcare, defense and aerospace industries.
OSI Systems has a Growth Style Score of A and a Zacks Rank #1. Notably, over the past 60 days, the Zacks Consensus Estimate for current fiscal year has moved upward by almost 5% to $4.22.
The company has an average positive earnings surprise of approximately 24.2% in the trailing four quarters.
Ewing, NJ-based, Universal Display Corporation (OLED - Free Report) is a leading developer of technology and intellectual property (IP) for the organic light emitting diodes market. New OLED-based product launches from premium handset makers like Apple, Google, Huawei, Oppo, Samsung, and Vivo are expected to augment order growth rate and the top line in the days ahead. Further, growing clout of OLED panels in automotive end-markets is a tailwind.
Universal Display has a Growth Style Score of B and a Zacks Rank #1. Notably, over the past 60 days, the Zacks Consensus Estimate for current fiscal year has moved upward by 20.2% to $2.44.
The company has an average positive earnings surprise of approximately 56.2% in the trailing four quarters.
Hillsboro, OR-based, Lattice Semiconductor Corporation (LSCC - Free Report) continues to gain from the 4th Tectonic Shift in computing market with its low-power parallelizable architecture which is required in edge computing devices. Further, Lattice’s CrossLink solution which helps in video bridging for ADAS and infotainment systems is witnessing an improvement in its adoption rate.
Lattice has a Growth Style Score of A and a Zacks Rank #2. Notably, over the past 60 days, the Zacks Consensus Estimate for current fiscal year has moved upward by almost 14% to 49 cents.
The company has an average positive earnings surprise of approximately 33.1% in the trailing four quarters.
Santa Rosa, CA-based KeySight Technologies Inc. (KEYS - Free Report) is benefiting from solid demand of its electronic design and test instrumentation systems. The company is beating the trade war woes by fortifying presence in the 5G network emulation market. Collaborations with Qualcomm, Xilinx and AT&T, and notable acquisitions including Ixia, Anite and AT4 Wireless have enriched Keysight’s 5G solutions portfolio.
Keysight has a Growth Style Score of A and a Zacks Rank #2. Notably, over the past 30 days, the Zacks Consensus Estimate for current fiscal year has moved upward by 8.2% to $4.23.
The company has an average positive earnings surprise of approximately 16.1% in the trailing four quarters.
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