4 No-Brainer Tech Stocks to Buy in September
September 16, 2021 at 08:09 AM EDT
The resurgence of COVID-19 cases, the Fed’s dovish monetary policy stance, and continuing digital transformation have been heightening investors’ interest in tech stocks. And considering the attractive current valuation and solid growth prospects of LG Display (LPL), NetScout Systems (NTCT), AdvanSix (ASIX), and ScanSource (SCSC), we think these names could be no-brainer picks from the tech space. Let’s discuss.
The tech industry plunged earlier this year as investors rotated away from expensive tech stocks to quality cyclical stocks to capitalize on the economic recovery. However, the resurgence of COVID-19 cases due to the rapid spread of its Delta variant, and the Fed’s dovish monetary policy stance, have been spurring renewed interest in tech stocks.
Investors’ interest in tech stocks is evidenced by the Technology Select Sector SPDR ETF’s (XLK) 9.8% returns over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 5% gains. Furthermore, the ongoing digital transformation and increasing use of cloud computing, artificial intelligence (AI), and other advanced technologies should keep driving the technology industry’s growth. According to GoRemotely, the tech industry is expected to hit a $5 trillion market value by the end of 2021.
Given the industry’s solid growth prospects, we think it could be wise to bet now on fundamentally strong tech stocks LG Display Co., Ltd. (LPL), NetScout Systems, Inc. (NTCT), AdvanSix Inc. (ASIX), and ScanSource, Inc. (SCSC). These stocks are rated Strong Buy or Buy in our POWR Ratings system. In addition, they possess a solid combination of growth and value attributes.
LG Display Co., Ltd. (LPL)
Based in Seoul, South Korea, LPL manufactures and sells thin-film transistor liquid crystal display and organic light-emitting diode technology-based display panels internationally. The company's TFT-LCD and OLED technology-based display panels are used primarily in televisions, notebook computers, desktop monitors, tablet computers, and mobile devices.
On September 7, 2021, LPL unveiled its latest state-of-the-art Transparent OLED technology at the International Motor Show (IAA) 2021. It plans to cooperate with Gauzy to replace windows in various types of transportation vehicles to enable smart and dynamic transparent displays. Hence, LPL’s market dominance is expected to increase significantly.
LPL’s revenues increased 31% year-over-year to KRW6,966 billion ($5.96 billion) for the second quarter, ended June 30, 2021. The company’s operating profit came in at KRW701 billion ($599.39 million), versus a KRW 517 billion ($442.06 million) operating loss in the prior-year period, while its EBITDA increased 328.6% year-over-year to KRW1,770 billion ($1.51 billion). Also, its net was KRW424 billion ($362.54 million) compared to a KRW 504 billion ($430.94 million) net loss in the year-ago period.
The company’s EPS is expected to be $0.54 for the quarter ending September 30, 2021, representing a 1,250% year-over-year increase. Its revenue is expected to increase 29.9% year-over-year to $26.71 billion in its fiscal year 2021. The stock has gained 25.4% in price over the past year to close yesterday’s trading session at $8.65.
LPL’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Value, and a B grade for Growth and Stability. To see additional POWR Ratings for LPL (Sentiment, Momentum, and Quality), click here. LPL is ranked #5 of 44 in the B-rated Technology - Electronics industry.
NetScout Systems, Inc. (NTCT)
NTCT in Westford, Mass., provides service assurance and cybersecurity solutions to protect digital business services against disruptions. The company’s offerings include nGeniusONE management software, nGeniusPULSE, nGenius Business Analytics solution, ISNG, and a suite of test access points. It serves enterprise customers across various industries through a direct sales force and indirect reseller and distribution channels.
On July 28, 2021, NTCT received third-party accreditation from the International Organization for Standardization, which reinforces its efforts to be an ISO/IEC 27001:2013 certified provider. Deb Briggs, a chief security officer with NTCT, said, "Receiving this certification assures our customers that we have implemented security measures and countermeasures that protect us from unauthorized access or compromise.”
NTCT’s total revenue increased 3.5% year-over-year to $190.30 million in its first fiscal quarter ended June 30, 2021. The company’s non-GAAP EBITDA increased 3.7% year-over-year to $27.59 million, while its non-GAAP net income increased 22.4% year-over-year to $14.96 million. Also, its non-GAAP EPS came in at $0.20, up 17.6% year-over-year.
Analysts expect NTCT’s EPS and revenue to increase 9.1% and 4.2%, respectively, year-over-year to $1.92 and $886.76 million in its fiscal year 2023. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock gained 20.7% in price to close yesterday’s trading session at $27.38.
NTCT’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The stock also has an A grade for Value and Growth.
AdvanSix Inc. (ASIX)
ASIX manufactures and sells polymer resins internationally. The Morris Plains, N.J.-concern offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam, ammonium sulfate fertilizers, and acetone. It offers its products under the Aegis, Capra, Sulf-N, Nadone, Naxol, and EZ-Blox brands.
On July 30, Erin Kane, president, and CEO of ASIX, said, “We continue to execute against a focused strategy, and the outlook for our business remains favorable. The continuation of strong underlying demand trends across our core markets, benefits from our high return capital projects and differentiated product portfolio, and our operational agility are all supporting expected record earnings and cash flow in 2021.”
The company’s sales surged 87.8% year-over-year to $437.68 million for the second quarter, ended June 30, 2021. ASIX’s EBITDA grew 147.2% year-over-year to $75.96 million. Its net income came in at $44.13 million, representing a 286.1% year-over-year increase, while its EPS was $1.53, up 273.2% year-over-year.
ASIX’s EPS is expected to be $1.02 for the quarter ending September 30, 2021, representing a 5,200% year-over-year increase. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The company’s revenue is expected to increase 35.3% year-over-year to $1.57 billion in its fiscal year 2021. The stock has gained 201.2% in price over the past year to close yesterday’s trading session at $37.02.
ASIX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth and Value, and a B grade for Quality.
ScanSource, Inc. (SCSC)
SCSC distributes technology products and solutions internationally. It operates in two segments: Worldwide Barcode, Networking & Security; and Worldwide Communications & Services. The Greenville, S.C.-based company also provides contact center and infrastructure services.
Intelisys, an SCSC company, announced a new, expanded relationship with Cisco Systems, Inc. (CSCO) on June 17. Intelisys’ President Mark Morgan said, "By adding Cisco to our industry-leading portfolio of providers, which rounds out an already impressive communications and collaboration-as-a-service offering, our ecosystem of agents, resellers, and MSPs can now sell more complete UC&C solutions to their customers and accelerate the adoption of cloud and recurring revenue."
SCSC’s net sales surged 34% year-over-year to $852.7 million for the fourth quarter ended June 30, 2021. The company’s non-GAAP operating income grew 245% year-over-year to $28.37 million, while its net income came in at $24.52 million, representing a 404.9% year-over-year increase. Also, its EPS was $0.96, up 405.3% year-over-year.
For the quarter ending September 30, 2021, analysts expect SCSC’s EPS and revenue to increase 57.1% and 7.1%, respectively, year-over-year to $0.66 and $810.83 million. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock gained 84.3% in price to close yesterday’s trading session at $34.06.
It’s no surprise that SCSC has an overall A rating, which equates to a Strong Buy in our POWR Rating system. In addition, the stock has an A grade for Sentiment, and a B grade for Growth, Value, and Quality.
Click here to see SCSC’s ratings for Stability and Momentum also. SCSC is ranked #3 in the Technology - Services industry.
LPL shares were trading at $8.46 per share on Thursday morning, down $0.19 (-2.20%). Year-to-date, LPL has gained 0.24%, versus a 19.81% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.4 No-Brainer Tech Stocks to Buy in September appeared first on StockNews.com