The pandemic coronavirus has been a rude shock to the stock markets. All three major US indices namely, the Dow Jones, the S&P 500 and the Nasdaq have declined roughly 30% since mid-February. Moreover, the unabated panic selling pushed all the three indices into the bear market territory, marking to be the fastest in history.
Coronavirus disease (COVID-19) is wreaking havoc on global trade, investments, tourism, supply chains and particularly, consumer confidence. Threat of a global recession is increasing day by day as the total number of infections crosses 244,500 with at least 10,000 deaths, per the Johns Hopkins University data. The economic impact of a recession will be severe as Economic Policy Institute expects three million job losses by the summer despite a moderate fiscal sop. OECD now anticipates global GDP to dip as low as 1.5% in 2020 from its previous projection of 3% provided in November 2019. Can Equity Markets See a Speedy Recovery on Higher Stimulus? Per CNBC and Goldman Sachs analysis, there have been 12 bear markets since World War II, the average decline being 32.5%. On average, these bear markets lasted 14.5 months and took a couple of years to rebound. However, some analysts now expect the equity markets to recover much faster than what was previously anticipated. This is primarily based on the various stimulus measures announced by the central banks and governments around the world to fight the economic downturn due to the pandemic. Notably, the U.S. government is preparing several packages of aid and compensation comprising $50 billion as small business loans. (Read More: The Countdown to the Recovery Has Begun) Meanwhile, the European Central Bank announced a new temporary asset purchase program of private and public sector securities called Pandemic Emergency Purchase Programme (PEPP) worth €750 billion. Beleaguered Tech Stocks: Lucrative Buys Investors are in particular having a tough time sailing through the current market turbulence. However, the panic-driven sell-off is creating buying opportunities in teeming proportion across sectors like technology, which remains attractive owing to consistent digital transformation. VIDEO
Rapid adoption of cloud computing along with the ongoing infusion of AI and machine learning as well as the accelerated deployment of 5G technology, blockchain, IoT, autonomous vehicles, AR/VR and wearables are major tailwinds.
Here we highlighted four technology stocks that have lost more than 40% year to date. Given the aforementioned factors, investors should take advantage of the beaten-down prices. Moreover, these stocks have a favorable combination of a Growth Score of A and a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Our Picks Amkor Technology ( AMKR - Free Report) is expected to benefit from solid demand for advanced packaging technologies in the consumer and mobile markets. Moreover, accelerated deployment of 5G is expected to strengthen the company’s position in the communications space. Additionally, the momentum across RF module, ADAS infotainment applications and power management areas is encouraging. This Zacks #1 Ranked stock’s earnings are anticipated to jump 78.6% this year. Shares of Amkor Technology have declined 55.5% year to date.
Digital Turbine APPS has been exhibiting an impressive performance, spurred by buoyant advertiser demand and incremental uptake of innovative offerings including SingleTap, Notifications and Folders. This Zacks Rank #2 company recently concluded the acquisition of Mobile Posse with an aim to strengthen its comprehensive mobile content delivery platform, which is anticipated to boost adoption further.
Digital Turbine’s fiscal 2021 earnings are expected to surge 82.5%, indicating an improvement from the year-ago reported figure. The stock has been down 47.7% year to date.
FireEye’s ( FEYE - Free Report) subscription-based cloud protection service helps end-customers identify malware on any network and take preventive measures automatically. As enterprises and governments urge a majority of their workforce to work remotely to limit the spread of the coronavirus, the threats of hacking are increasing exponentially. Moreover, as people are subjected to quarantines, the usage of internet-based services is booming, thereby offering huge scope for hackers to make a kill. This Zacks #2 Ranked company expanded FireEye-as-a-Service (FaaS) to incorporate its threat intelligence and analytics in all alerts that its customers receive and not just those from FireEye's technology stack. The company’s 2020 earnings are expected to soar 320%, suggesting a rise from the previous year’s reported figure. The stock has dropped 43.3% year to date.
Perion Network ( PERI - Free Report) is riding on an expanding publisher base, increasing number of unique searches and higher revenues per month (RPM). Moreover, Perion’s search business Codefuel’s improving revenue trajectory, driven by product innovation and effective sales effort, holds promise. Further, the buyout of Content IQ (CIQ) is expected to enhance this Zacks Rank #2 company’s digital branding division, Undertone, with more personalization content capabilities.
The company’s 2020 earnings are expected to increase 36.7%, implying growth from the prior year’s reported figure. The stock has plunged 41% year to date.
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