3 unstoppable tech stocks to buy on a downturn
Tech stocks have soared last year as the COVID-19 pandemic has accelerated the pace of digital transformation. As more people were forced to stay at home, tech stocks soared. As we entered 2021, people were vaccinated and more states opened up, tech stocks gave way to more cyclical names.
Over the past two months, tech growth stocks and cyclical value stocks have traded at the top of the market every day. But minus today’s market sell-off, growth stocks appear to be making a comeback. Even in the midst of higher inflation, long-term Treasury yields no longer skyrocket due to massive market liquidity. Moreover, the Fed’s final minutes are accommodating, indicating that officials are not ready to tighten policy.
When you add the highly infectious strain of the Delta variant of COVID-19 and the potential for more blockages, tech stocks seem like a good bet. Teradata Company (PMH), HP Inc. (HPQ) and Broadcom Inc. (AVGO) are three highly rated technology companies in our POWR rating system that look poised for gains in the weeks and months to come.
Teradata Company (PMH)
TDC operates in the data and analytics business, which captures, integrates, stores, manages and analyzes data of all types to answer business questions and deliver information. It also offers marketing management products to help businesses build customer loyalty. Its solutions include data warehousing, big data, discovery tools, integration tools and business intelligence tools to manage and integrate the complex data ecosystem.
The company’s efforts to extend the cloud-based functionality of its Vantage offering is a key growth driver. This solution is available from major public cloud providers, including Google Cloud, AWS, and Azure. TDC Teradata generates significant revenues from financial services, government and healthcare, which tend to remain stable. This helps to increase the turnover of the company.
The transition to a subscription-based business model is expected to boost the company’s recurring revenue and be a long-term growth driver. In addition, TDC’s strong portfolio of solutions is also expected to increase its market share in the big data market. The company has an overall rating of A, which translates into a strong buy rating.
TDC has a growth rating of A, which makes sense since the company’s EBITDA grew 65.4% last year. Wall Street analysts expect profits to rise 91.7% year-over-year in the second quarter. The company also has an A value rating. The company has a price-to-cash flow ratio of 15.3, which is well below the industry average.
We also provide Momentum, Stability, Sentiment and Quality ratings for CDT, which you can find here. TDC is ranked # 1 in the A-rated Technology storage industry. You can find other top stocks in this industry by click here.
HP Inc. (HPQ)
HPQ is a leading supplier of computers, printers and printer supplies. Its three operational lines of business are its personal systems, containing laptops, desktops and workstations, and its printing sector includes supplies, consumer equipment, commercial equipment and business investments. .
The company has benefited from strong demand for PCs, which began amid the pandemic’s trend of remote working and online learning. In the second quarter, the company’s total PC shipments grew 44% year-over-year, while laptops grew 63%. This is expected to continue as more people and businesses spend more on improving home technology products.
HPQ is also one of the biggest sellers of printers. The company has launched a variety of new models in the PC segment and in the printing segment. In fact, the company has announced a rebound in its printing business for the second quarter. HPQ has an overall rating of B and a purchase rating in our POWR rating system.
The company has a growth rating of B as profits rose 38.2% in the past year, while EBITDA jumped 49.3%. Analysts expect profits to rise 71.4% in the current quarter. HPQ also has a B quality rating due to its strong fundamentals. The company had $ 3.4 billion in cash at the end of the last quarter, compared to just $ 1.2 billion in short-term debt.
For the rest of the HPQ scores (Value, Momentum, Stability and Feeling), Click here. HPQ is ranked # 4 in the B-rated – Hardware technology industry. For more leading actions in this industry, Click here.
Broadcom Inc. (AVGO)
AVGO is the combined entity of Broadcom and Avago. Its Avago business is primarily focused on radio frequency filters and amplifiers used in high-end smartphones, such as Apple iPhone and Samsung Galaxy devices. Its Legacy Broadcom business includes network semiconductors, such as switching and physical layer chips, broadband products, and connectivity chips.
The company enjoys continued strength in its semiconductor solutions and infrastructure software verticals. For example, the strong adoption of Wi-Fi 6 in DOCSIS 3.1 access gateway and cable products bodes well for its long-term growth. In addition, the acceleration of the deployment of 5G and the rise in the production of radio frequency content are also facilitating future prospects.
The Internet of Things (IoT) is expected to create new avenues for AVGO, as it is widely seen as the next growth opportunity in semiconductors, as it has the potential for over a billion connected devices. In addition, the company continues to make acquisitions to expand the scope and diversify its product portfolio. AVGO has an overall rating of A, which translates into a strong buy rating in our POWR rating system.
The company has a stability rating of B because its growth and price performance has been fairly consistent. For example, the stock has grown its EBITDA by an average of 44.8% per year over the past five years. AVGO also has a quality rating of B due to a strong balance sheet. The company has a current ratio of 2.2, which indicates that it has sufficient liquidity to meet short-term needs.
To access the rest of AVGO’s notes (Growth, Value, Momentum and Sentiment), Click here. AVGO is ranked # 4 in the B-rated wireless semiconductor and chip industry. For other top-ranked stocks in this industry, Click here.
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Chief Value Strategist, StockNews
Editor-in-Chief, POWR Value Newsletter
TDC shares were left unchanged on Tuesday after trading hours. Year-to-date, TDC has gained 107.88%, compared to a 16.05% increase in the benchmark S&P 500 over the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the chief value strategist for StockNews.com and the publisher of the POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services firms, hedge funds and online publications. David enjoys researching and writing about stocks and markets. It takes a fundamental quantitative approach in evaluating stocks for readers. After…