Technology has been one of the best performing sectors so far in 2019. This is evident from the fact that the Technology Select Sector SPDR ETF (XLK) has returned 45.7% on a year-to-date basis.
Although the sector faced several issues, including the U.S.-China trade war and related tariffs, concerns over Brexit, Huawei ban, lower semiconductor capital spending, sluggish server market, the robust performance reflect strong fundamentals.
Rapid adoption of cloud computing, AI and ML tools, IoT, ADAS, smart speakers, virtual assistants, wearables, drones, VR/AR devices and blockchain have helped tech stocks outperform all benchmarks this year so far.
Tech Prospects Bright in 2020
Technology has become ubiquitous in several other sectors including retail, banking & finance, healthcare and oil & gas.
From digitizing retail outlets with automated check-out technology, modernizing payment systems with robust cybersecurity measures, revolutionizing health care mechanisms and education with credible data-driven insights, the growing clout of modern technology benefits almost all sectors.
Moreover, the accelerated deployment of 5G technology is likely to create further growth opportunities in the telecom space for tech stocks in 2020.
While the United States is expected to maintain the momentum in LTE network growth over the near term, the major impetus is likely to come from the emerging markets. Governments in these countries are spending on smart cities and IoT projects and instituting preferential policies along with structural subsidies to boost next-generation high-speed broadband.
Further, improving macro-economic environment is expected to boost prospects next year. The partial trade deal between the United States and China is expected to benefit Apple (AAPL - Free Report) and semiconductor stocks like Intel (INTC - Free Report) .
Strategy to Pick Potential Winners
Value stocks are seen as cheap relative to the market though stocks trading under $20 can be seen as more volatile than their pricier peers. Nonetheless, investors can expect big returns with the right stocks that are currently undervalued.
Moreover, undervalued or cheap stocks provide low barrier to entry and a high risk-to-reward opportunity amid prevailing volatility in global markets.
With the help of our Zacks Stock Screener, we have picked five technology stocks that are currently trading for less than $20 a share.
Moreover, these stocks carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
To further narrow down the list, we have selected stocks that have a Value Score of A or B. Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 or 2 makes them good investment opportunities.
PLDT Inc. (PHI - Free Report) is a Makati City, Philippines-based wireless firm that offers cellular mobile, Internet broadband distribution, solutions and systems integration, satellite communications, and satellite information and messaging services.
PLDT sports a Zacks Rank #1 and has a market cap of $4.2 billion. The company also has a Value Score of A. The stock is currently priced at $19.34 per share.
Notably, the Zacks Consensus Estimate for 2020 earnings has been steady at $2.23 per share over the past 30 days.
KT Corporation (KT - Free Report) is headquartered in Sungnam, South Korea. Its telecommunication services include mobile, telephone services, fixed-line and VoIP telephone services.
KT Corporation flaunts a Zacks Rank #1 and has a market cap of $5.55 billion. The company also has a Value Score of B. The stock is currently priced at $11.44 per share.
Notably, the Zacks Consensus Estimate for 2020 earnings has been steady at $1.25 per share over the past 30 days.
Amkor Technology (AMKR - Free Report) is one of the largest providers of semiconductor packaging and test services based in Tempe, AZ.
Amkor sports a Zacks Rank #1 and a market cap of $3.07 billion. The company also has a Value Score of B. The stock is currently priced at $12.91 per share.
Notably, the Zacks Consensus Estimate for 2020 earnings has been steady at 40 cents per share over the past 30 days.
Covetrus (CVET - Free Report) is based in New York. The company provides animal-health technology and services.
Covetrus has a Zacks Rank #2 and has a market cap of $1.46 billion. The company also has a Value Score of A. The stock is currently priced at $13.28 per share.
Notably, the Zacks Consensus Estimate for 2020 earnings has been steady at 69 cents per share over the past 30 days.
Vipshop Holdings Limited (VIPS - Free Report) is an online discount retailer for brands, headquartered in Guangzhou. This online discount retailer offers branded products to consumers in China through flash sales on its vipshop.com website.
Vipshop carries a Zacks Rank #2 and has a market cap of $9.1 billion. The company also has a Value Score of B. The stock is currently priced at $13.85 per share.
Notably, the Zacks Consensus Estimate for 2020 earnings has increased by couple of cents to $1.20 per share over the past 30 days.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
Start Your Access to the New Zacks Top 10 Stocks >>