How to short tech stocks

How to short tech stocks DEFAULT
(updated 6 hours, 43 minutes ago)
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Sours: https://www.etfchannel.com/type/Technology-Short-ETFs/

After an astounding five-month surge, the tech-heavy Nasdaq Composite Index saw a blood bath in the recent trading sessions. The benchmark slumped to the correction territory (down 10% from the peak) in just three days, representing its quickest plunge ever from a record close (read: Don't Fear Correction: ETF Laggards Are Emerging Leaders).

In fact, the seven biggest U.S. tech stocks — Facebook FB, Amazon.com AMZN, Apple AAPL, Tesla TSLA, Microsoft MSFT, Alphabet GOOGL and Netflix NFLX — have lost more than $1 trillion in value over the past three days. Most of the decline came on the back of concerns over high valuations and a sluggish economic recovery in the wake of the coronavirus pandemic.

Per the Financial Times report last week, SoftBank has built stakes in major U.S. tech companies worth around $4 billion and purchased billions worth of call options in recent months that helped to fuel the sharp ascent for big tech stocks. This news has also pushed tech stocks into a tailspin.

A deadlock in another financial-aid package, budget negotiations and election uncertainty added to the chaos. Further, geopolitics continued to be an overhang on the stocks. In the latest development, President Donald Trump is seeking to curb the U.S. relationship with China, threatening to punish any American companies that create jobs overseas and forbid those that do business in China from winning federal contracts. The Trump administration is also considering another ban on China’s cotton.

The broad market sell-off has resulted in a spike in inverse or inverse leveraged ETFs. These products either create a short position or a leveraged short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in a short period of time, provided the trend remains a friend (read: Should You Invest in Tech ETFs After a Sharp Sell-Off?).

However, these funds run the risk of huge losses compared with the traditional ones in fluctuating or seesawing markets. Further, their performance could vary significantly from the actual performance of the underlying index over the longer period compared to a shorter period (such as, weeks or months).

We have highlighted the five leveraged inverse ETFs that piled up more than 35% gains over the past three trading sessions, though these involve a great deal of risk when compared to traditional products.

BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN FNGD – Up 47.7%

This note seeks to offer three times inverse leveraged exposure to the NYSE FANG+ Index, which is an equal-dollar weighted index targeting the highly-traded growth stocks of next-generation technology and tech-enabled companies in the technology and consumer discretionary sectors. The ETN has accumulated $96.9 million since then. It charges 95 bps in annual fees and trades in average daily volume of 2.2 million shares.

Daily Dow Jones Internet Bear 3X Shares WEBS – Up 38.8%

This fund provides three times inverse play on the Internet corner of the broad technology sector by tracking the Dow Jones Internet Composite Index. It has attracted $3.2 million in its asset base and charges 95 bps in annual fees. The ETF sees an average daily volume of more than 164,000 shares.

Direxion Daily Technology Bear 3x Shares TECS - Up 38.5%

This product provides three times inverse exposure to the daily performance of the Technology Select Sector Index. It has amassed about $63.7 million in its asset base while charging 95 bps in fees per year from investors. Volume is good as it exchanges around 2.6 million shares a day on average (read: ETF Winners & Losers From Wall Street's Worst Day Since June).

Direxion Daily Semiconductor Bear 3x Shares SOXS – Up 37.4%

This ETF provides three times inverse exposure to the PHLX Semiconductor Sector Index. It charges 0.95% in annual fees and trades in average daily volume of 6.7 million shares. It manages $108.9 million in its asset base.

ProShares UltraPro Short QQQ SQQQ – Up 37%
 
This ETF provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, charging 95 bps in annual fees. It has AUM of $1.6 billion and trades in average daily volume of about 32.7 million shares. SQQQ charges 95 bps per year.

Bottom Line

While the strategy is highly beneficial for short-term traders, it could lead to huge losses compared with traditional funds in fluctuating markets (see: all the Inverse Equity ETFs here).

Still, for ETF investors, who are bearish on the tech sector for the near term, either of the above products could make an interesting choice. Clearly, these could be attractive for those with high-risk tolerance, and a belief that the “trend is the friend” in this specific corner of the investing world.

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Sours: https://www.yahoo.com/now/5-inverse-tech-etfs-jump-140502504.html
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UltraShort Technology - REW UltraShort Technology

ProShares UltraShort Technology seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. TechnologySM Index.

This short ProShares ETF seeks a return that is -2x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return and ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. Investors should consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product.

ProShares Perspective on New SEC Regulations of Mutual Funds and ETFs
— read the statement.

Index/Benchmark Summary

The Dow Jones U.S. Technology Index measures the performance of the technology sector of the U.S. equity market. Component companies include those involved in computers and office equipment, software, communications technology, semiconductors, diversified technology services and Internet services.

Fundamentals as of 9/30/21

Total Number of Companies171
Price/Earnings Ratio34.79
Price/Book Ratio9.74
Dividend Yield*(%)0.62
Average Index Market Capitalization $76.32 billion

* Derivative contracts are priced to reflect the underlying index yield and will not generate dividend income. Because ProShares invest in derivatives, they will not have dividend distributions that reflect those of their applicable indexes.

Index Holdings Information as of 9/30/21

Top 10 Index Companies Weight
Apple Inc.17.82%
Microsoft Corp.16.99%
Facebook Inc.-Class A6.49%
Alphabet Inc.-Class A6.46%
Alphabet Inc.-Class C6.02%
NVIDIA Corp.4.14%
Adobe Inc.2.20%
Salesforce.com Inc.2.11%
Cisco Systems Inc.1.84%
Intel Corp.1.73%

ProShares may invest in financial instruments (including derivatives) that, in combination, should have similar daily price return characteristics to the fund's benchmark.

Index Holdings as of 9/30/21

Index Sector Weightings §Weight
Software & Services38.01%
Technology Hardware & Equipment21.85%
Media & Entertainment20.65%
Semiconductors & Semiconductor Equipment17.66%
Retailing0.87%
Health Care Equipment & Services0.54%
Telecommunication Services0.22%
Consumer Durables & Apparel0.19%

§ Sum of weightings may not equal 100% due to rounding.


Sours: https://www.proshares.com/funds/rew_index.html
The 3 Best Inverse ETFs to Short the S\u0026P 500 Index

The Best Inverse ETFs of the 2020 Bear Market

Contrarian investors seeking to capitalize on stock market declines can profit during a bear market using an inverse exchange-traded fund (ETF). A bear market is typically defined as a situation where securities prices fall 20% or more from recent highs amid widespread investor pessimism. The spread of COVID-19 and its effect on investor sentiment triggered a collapse in securities prices earlier this year. Inverse ETFs are designed to make money when the stocks or underlying indexes they target go down in price. These funds make use of financial derivatives, such as index swaps, in order to make bets that stock prices will decline. Unlike shorting a stock, though, investors in inverse ETFs can make money when markets fall without having to sell anything short.

Key Takeaways

  • The 2020 bear market lasted from February 19 to March 23, and the S&P 500's total return was -33.8% from peak to trough.
  • The inverse ETFs with the best performance during the 2020 bear market were RWM, DOG, and HDGE.
  • To achieve their inverse exposure, the first two ETFs make use of various swap instruments, and the third ETF holds short positions in different stocks.

The inverse ETF universe is comprised of about 10 ETFs, excluding leveraged ETFs and ETFs with less than $50 million in assets under management (AUM).The last bear market took place from February 19, 2020 to March 23, 2020, during which the total return for the S&P 500 was -33.8%. The best inverse ETF during the 2020 bear market, based on its total return between the two dates above, was the ProShares Short Russell 2000 (RWM). We examine the three best inverse ETFs of the 2020 bear market below. All numbers in this story are as of March 3, 2021.

Inverse ETFs can be riskier investments than non-inverse ETFs, because they are only designed to achieve the inverse of their benchmark's one-day returns. You should not expect that they will do so on longer-term returns. For example, an inverse ETF may return 1% on a day when its benchmark falls -1%, but you shouldn't expect it to return 10% in a year when its benchmark falls -10%. For more details, see this SEC alert.

ProShares Short Russell2000 (RWM)

  • Bear market return: 55.4%
  • Performance over 1-Year: -30.95%
  • Expense Ratio: 0.95%
  • Annual Dividend Yield: 1.20%
  • Average Trading Volume: 2,085,612
  • Assets Under Management: $254.83 million
  • Inception Date: January 23, 2007
  • Issuer: ProShares

RWM seeks to provide a daily return, before fees and expenses, that is -1x the daily performance of the Russell 2000 Index, an index which tracks the performance of the small-cap segment of the U.S. equity market. The ETF makes use of both ETF and index swaps to achieve its inverse exposure. Since the -1x exposure is for a single day, investors holding the fund for longer than a day will be exposed to compounding effects, causing returns to deviate from the expected inverse exposure.

ProShares Short Dow30 (DOG)

  • Bear market return: 47.3%
  • Performance over 1-Year: -20.44%
  • Expense Ratio: 0.95%
  • Annual Dividend Yield: 1.96%
  • Average Trading Volume: 907,272
  • Assets Under Management: $314.36 million
  • Inception Date: June 19, 2006
  • Issuer: ProShares

DOG aims to provide a daily return, before fees and expenses, that is -1x the daily performance of the Dow Jones Industrial Average (DJIA). The Dow is an index that tracks 30 large, publicly-owned blue chip companies on the New York Stock Exchange (NYSE). The ETF provides inverse exposure to these 30 stocks through the use of various swap instruments. Since the inverse exposure is daily, investors holding the fund for longer periods of time should not expect -1x performance. The fund uses DJIA swaps to obtain its inverse exposure.

AdvisorShares Ranger Equity Bear ETF (HDGE)

  • Bear market return: 47.3%
  • Performance over 1-Year: -43.48%
  • Expense Ratio: 3.36%
  • Annual Dividend Yield: 0.27%
  • 3-Month Average Daily Volume: 1,093,326
  • Assets Under Management: $56.81 million
  • Inception Date: January 26, 2011
  • Issuer: AdvisorShares

HDGE seeks to achieve positive returns by shorting stocks listed on U.S. exchanges. The ETF uses a combination of quantitative and fundamental factors in order to build a portfolio of equities to short. Good candidates are stocks of firms with low earnings quality or aggressive accounting practices. However, shorting stocks is expensive, which results in high ETF fees. The fund's three biggest shorts are Canon Inc. (CAJ), a Japan-based manufacturer of copying machines, printers, cameras, and lithography equipment; Pros Holdings Inc. (PRO), a provider of business software services; and Snap-On Inc. (SNA), a tool and equipment manufacturer.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Sours: https://www.investopedia.com/investing/bear-market-etfs/

Stocks tech to how short

5 Battered Tech Stocks to Buy Now

The market has been quite volatile over the past month or so, with tech stocks bearing the brunt of the selling. 

The turbulence certainly didn't come out of nowhere. September has historically been tough for the markets, while October tends to be one of the most volatile months. And this year, in particular, there is plenty for investors to worry about, including a looming debt ceiling – the short-term bill making its way through Congress only goes to early December – an imminent Fed tapering and supply-chain issues.

And while the S&P 500 is down almost 4% from its early September peak, the technology sector is faring even worse, with the Nasdaq Composite off almost 5%. Exacerbating troubles for tech stocks is the recent rise in Treasury yields. Higher rates on bonds can weigh on the broader stock market, but often hit tech shares the hardest, considering costlier borrowing can eat into margins.

However, even with the market volatility, business growth is expected to accelerate next year, and the economic recovery is still moving along. As such, the recent selloff creates an opportunity to scoop up beaten down shares of some of the best tech stocks at more attractive prices.

To aide in our search for solid companies to buy on the dip, we turned to the Stock News POWR Ratings system to search for Buy- and Strong Buy-rated stocks that saw losses of more than 10% in the past month – suggesting the selling is overdone. 

Based on that criteria, here are five of the best tech stocks to buy right now.

Data is as of Oct. 11. POWR Ratings work on an A-B-C-D-F system. Stocks are listed in order of lowest to highest overall rating, and then alphabetically.

1 of 5

Adobe

Someone looks for the Adobe app on their tablet
  • Market value: $272.7 billion
  • POWR Ratings overall rating: B (Buy)
  • POWR Ratings average broker rating: 1.38

Adobe (ADBE, $573.07) provides content creation, document management and digital advertising software and services to creative professionals and marketers. Its flagship products include Photoshop, Acrobat, Dreamweaver, Illustrator and InDesign.

The company reported strong fiscal third-quarter results, with both earnings and revenues rising year-over-year. Sales growth was driven by the company's Creative Cloud, Document Cloud and Experience Cloud offerings. ADBE is also benefiting from growth in emerging markets, strong online video creation demand and solid adoption of Acrobat.

In fact, Adobe continues to be a market leader in the digital media space. With advertising, entertainment and other types of content creation becoming digitalized, ADBE is poised to reap the benefits. For instance, it entered the digital marketing space with its acquisition of online marketing and web analytics firm Omniture. Digital marketing is one area when corporate spending is rising. This is due to the increased adoption of cloud computing, big data analytics and social media. These tailwinds should increase growth for ADBE over the long term. 

The stock has an overall grade of B (Buy) in the POWR Ratings system. The company has a Sentiment Grade of B, which is in line with its analyst ratings. Of the 28 analysts tracking Adobe, 24 rate it a Buy or Strong Buy. And analysts peg potential upside at 25%, based on its average price target. 

ADBE also has a Quality Grade of A, which isn't surprising with a low debt-to-equity ratio of 0.3, signaling very little debt leverage, and a current ratio of 1.4 that indicates Adobe is plenty capable of tackling its shorter-term liabilities. Management is also very efficient, with a return on equity of 40.5%. 

Shares are down over 13% over the past month, making Adobe of the best tech stocks to buy right now. Get Adobe's (ADBE) complete POWR Ratings analysis here.

2 of 5

Plantronics

headset on laptop
  • Market value: $1.0 billion
  • POWR Ratings overall rating: B (Buy)
  • POWR Ratings average broker rating: 1.50

Plantronics (POLY, $23.82) designs and manufactures lightweight communications headsets, telephone headset systems and other communications endpoints. Its headsets are used in contact centers, mobile devices, gaming and other applications. Products are shipped through a network of distributors, retailers, wireless carriers and original equipment manufacturers.

The company is benefiting from a shift toward high-fidelity solutions needed in hybrid work and video collaborations. These play a critical role in the work-from-home environment as the simple user interfaces allow people to navigate connectivity issues. In fact, its extensive technical knowledge and portfolio of IP rights give it a competitive advantage over its rivals.

Management is cutting costs, making smart investments in new products and balancing its supply chain exposure. Additionally, POLY announced the Poly Studio P Series. This family of prosumer video solutions addresses the growing need for tools that allow professionals to work from anywhere. 

The company also announced Poly Lens Desktop App and Poly+. Poly Lens provides capabilities for voice, video and headsets under a single pane of glass, while Poly+ is a personal device service that provides troubleshooting tools. These consumer-focused products should help POLY strengthen its market position. 

The POWR Ratings system pegs POLY as a B-rated Buy. The company has a Growth Grade of B, as revenue has grown an average of 15.6% per year over the past five years. Plus, analysts expect earnings to rise an average of 15% per year over the next five years. 

Plantronics also has a Value Grade of A, helped in large part by an attractive price-to-sales ratio of 0.6. This is well below the industry average of 2.5 and the S&P 500's 3.1.

Over the past month, the stock is down more than 12%, making this is one of the best tech stocks to buy on the dip. Here is the complete POWR Ratings analysis for Plantronics (POLY).

3 of 5

Synopsys

robotic arm holding chip
  • Market value: $44.0 billion
  • POWR Ratings overall rating: B (Buy)
  • POWR Ratings average broker rating: 1.53

Synopsys (SNPS, $288.74) is a market leader in electronic design automation (EDA) software. EDA is used to automate the design and verification of integrated circuits (ICs) or larger chip systems. The company provides an end-to-end workflow of EDA products. It also offers a broad set of design intellectual property (IP) and leading software integrity tools that help customers develop secure, quality code.

The firm had a solid fiscal third quarter, as it saw strength across all its end markets and geographic areas, especially in China. Its EDA product group, which is its largest segment by revenue, was the main driver of sales growth. Revenue from China grew 31% sequentially, with broad-based adoption by companies in the mainland a massive driver of SNPS' growth.

Strong traction for the company's Fusion Compiler product also boosted its top line. Synopsys is seeing growing demand for advanced technology, design, IP and security solutions. Plus, secular tailwinds in emerging technologies such as artificial intelligence (AI), 5G, the Internet of Things and "big data" have led to investments in machine learning (ML) architectures.

Due to this, many companies have selected SNPS to be their primary EDA partner, including Advanced Micro Devices (AMD) and Juniper Networks (JNPR). 

Synopsys is one of several B-rated (Buy) stocks in the POWR Ratings system. SNPS has a Sentiment Grade of B, as it is well-liked by the ''Smart Crowd," with 13 out of 14 Wall Street analysts rating it a Buy or Strong Buy. And based on the highest analyst price target of $350, the stock has a potential upside of 21%. 

SNPS also has a Quality Grade of A in large part because of its rock-solid balance sheet. Not only does the company have a debt-to-equity ratio of 0.1, but both its current and quick ratios are over 1.0. 

This all makes Synopsys look like one of the best tech stocks to buy on the dip following a roughly 13% decline over the past month. Read more about the full POWR Ratings for Synopsys (SNPS) here.

4 of 5

Silicon Motion Technology

hard disk ssd on motherboard
  • Market value: $2.3 billion
  • POWR Ratings overall rating: A (Strong Buy)
  • POWR Ratings average broker rating: 1.38

Headquartered in Taiwan, Silicon Motion Technology (SIMO, $66.37) is a leading developer of microcontroller ICs for NAND flash storage devices. The company focuses on designing, developing and marketing controllers for managing NAND flash used in embedded storage applications. This includes eMMC embedded memory. Its products are used in personal computing, smartphones, tablets, flash drives and enterprise and data centers.

The firm has benefited from solid demand for its solid-state drive (SSD) controllers and eMMC and UFS controllers. This led to a year-over-year increase in both revenue and earnings per share (EPS) in the most recent quarter. 

SIMO is a leading merchant supplier of client SSD controllers to module makers. Management believes the market will soon be dominated by SSDs that use TLC (triple-level cell) flash, which is a type of NAND flash memory that stores three bits of data per cell. That should bolster their use in PCs, displacing mechanical hard disk drives. 

SSDs offer higher performance and competitive advantage over HDDs, which is why PCs are increasingly adopting them. Plus, Silicon Motion Technology believes its SSD controller will be used for managing 3D flash in the future, and its eMMC controllers are showing signs of a rebound.

SIMO's overall grade of A (Strong Buy) in our POWR Ratings system includes a Growth Grade of B. Its revenue has risen 22.7% over the past year. Its EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to surge 30% over the next year. And in the shorter term, analysts expect earnings to soar 115.8% in the current quarter from the year prior. 

Additionally, Silicon Motion Technology has a Quality Grade of B, indicating a solid balance sheet. At the end of the second quarter, the company had a cash balance of $357 million. This is up from the previous quarter and compares favorably to its current liabilities. 

SIMO is down over 12% in the past month, so investors looking for great tech stocks to buy on the dip might want to keep this one on their radar. Check out the complete POWR Ratings analysis for Silicon Motion Technology (SIMO) here.

5 of 5

Zebra Technologies

Barcode scanner
  • Market value: $26.3 billion
  • POWR Ratings overall rating: A (Strong Buy)
  • POWR Ratings average broker rating: 1.62

Zebra Technologies (ZBRA, $493.13) is a leading provider of automatic identification and data capture technology for enterprises. Its solutions include barcode printers and scanners, mobile computers and workflow optimization software. The company primarily serves the retail, transportation, logistics, manufacturing and healthcare markets, designing custom solutions to improve efficiency for its customers.

ZBRA is expected to benefit from solid demand for its printing, supplies and enterprise mobile computing. In addition, growth in its RFID product lines should support sales growth. Zebra's focus on supply-chain optimization, cost-saving actions and investments in software capability also bodes well for its margins.

In addition, the firm is also seeing momentum in its Enterprise Asset Intelligence solutions due to investments in product development. Based on these developments, management raised its full-year net sales growth forecast to 23% and 25%. This was raised from its previous guidance of 18% to 22%. 

The company has also been steadily strengthening its business through acquisitions. For instance, ZBRA's recent acquisition of on-demand automation firm Fetch Robotics should strengthen its capability to offer a wide range of advanced robotics solutions to customers.

The POWR Ratings system gives Zebra an overall grade of A, which translates into a Strong Buy. ZBRA has a Growth Grade of B as its EPS have grown an average of 35.3% annually over the last three years. What's more, analysts expect earnings to rise 24.2% year-over-year in the current quarter. 

ZBRA also has a Quality Grade of B. At the end of the most recent quarter, ZBRA had $369 million in cash compared to only $47 million in short-term debt. Plus, its debt-to-equity ratio is low at 0.4. 

Over the past month, the stock is down roughly 15%, making it one of the best tech stocks to buy right now. Get Zebra's (ZBRA) complete POWR Ratings analysis here.

Sours: https://www.kiplinger.com/investing/stocks/tech-stocks/603587/battered-tech-stocks-to-buy
Why I'm Shorting Tech Stocks Now

Opinion: Forget short-term stock-market fads and just buy these 5 rocketing tech stocks

Read:The S&P 500 is headed for 5,000, says UBS. Here’s the when and how.

Recent share performance and recent earnings in these five $20 billion-plus companies proves this sector remains a massive growth center for Wall Street regardless of the short-term news cycle. So if you’d rather go with tried-and-true profits over a quirky play based on your personal interpretation of the headlines, here are five tech stocks to consider for their current growth and long-term potential.

Fortinet

In a modern digital economy, hacking and high-tech risks remain a persistent threat. That creates a constant need for companies like $50 billion security giant Fortinet FTNT, to ply their services, likely for years to come.

Proof of this growth trend isn’t built on some hysterical headline about data breaches, but rather through tangible profit and sales growth. Fortinet’s second-quarter earnings on July 29 featured revenue expansion of 30% year-over-year and record free cash flow. What’s more, product sales exploded 41% higher thanks to what is seen as a new data center upgrade cycle — meaning these installed products will deliver down the road via recurring service and maintenance revenue.

Fortinet has been around since the dot-com days and sometimes gets overlooked for younger and more volatile cyber players that find short-term appeal. But this is not a sleepy legacy tech stock; it has 12-months returns of more than 140% thanks to impressive fundamentals and the long-term megatrend of cybersecurity growth. In fact, those gains make it the top-performing tech stock in the S&P 500 over the last 12 month.

And with $3.3 billion in cash on the books and more than 1,000 patents issued or pending, this is not a tech stock that will easily be disrupted by some of those upstart cyber firms that may make flashy headlines, too.

Nvidia

This $560 billion chipmaking powerhouse is one of Wall Street’s biggest success stories. Nvidia’s stock is up more than 1,300% in the last five years. Momentum hasn’t slowed much of late, with gains of more than 70% in the last 12 months.

That’s because the fundamentals are just too good to pass over. In Nvidia’s NVDA, second-quarter earnings report, it reported better-than-expected revenue growth of 68% year-over-year to tally a record $6.51 billion on the top line. Earnings surged even more, with an 89% year-over-year growth rate that also topped analysts’ estimates.

This comes on the heels of another sales record in its first-quarter report — an impressive performance despite supply-chain disruptions and chip shortages that could be holding Nvidia back from meeting the full appetite of the marketplace.

Looking forward, Nvidia is still suffering through antitrust review of its $40 billion acquisition plan for Arm Ltd., a big-ticket move that could cement this tech stock as the leading artificial intelligence firm on the planet. It all adds up to a tremendous growth story that has proved durable, regardless of broader headlines or economic cycles.

Read:Nvidia’s ARM acquisition is stalled, and there’s a deadline with more than a billion dollars at stake

Square

Shares in this mobile payments giant founded and run by Jack Dorsey have soared 2,100% over the last five years and continue to outperform with a roughly 70% gain in the last 12 months.

And why shouldn’t investors love Square’s SQ, stock? Its most recent earnings showed a thriving ecosystem, split about evenly between its point-of-sales technology and its Cash App money transfer tool that tallied 40 million transacting-active customers. Revenue set a record at almost $4.7 billion, more than double the prior year, thanks in large part to this rapid adoption.

Earnings have moved dramatically into positive territory as a result, with earnings of 66 cents a share — more than triple the 18 cents a year ago and a sign that this is not a company running a loss as it seeks scale, but rather a true profit-generating enterprise.

The icing on the cake: Square remains one of the seven largest holdings in the flagship ARK Investment fund run by Cathie Wood, the Ark Innovation ETF ARKK, that currently has 4% of its $25 billion in assets in the stock. That will provide sustained buzz and buying pressure to support this stock’s already impressive run.

Trimble

High-tech sensor and analytics firm Trimble TRMB, isn’t exactly a high-profile tech stock, but at about $24 billion in market value and almost $4 billion in annual revenue, this, too, is no cash-burning startup. In fact, it is a leader in geospatial mapping and tracking, with deep relationships to industries including energy, agriculture, transportation and defense.

The potential of real-time tracking and GPS-related applications is huge, and recent earnings show this. Trimble just reported record second-quarter revenue with a 29% year-over-year growth rate that powered 38% earnings growth and record operating cash flow. Looking forward, Wall Street expects Trimble to expand sales by 10% over the next year.

Speaking of Wall Street, investors generally have been quite optimistic on the stock, based on gains of more than 230% from the spring 2020 lows and gains of more than 40% year-to-date in 2021.

Admittedly, Trimble is a quirky tech stock that doesn’t have the massive scale or consumer appeal some traders like to see. But high-tech mapping and geolocation applications are increasingly important to businesses of all shapes and sizes — and the long-term potential of this highflying tech stock is real.

Zebra 

Zebra Technologies ZBRA, is a mobile sensor and analytics company that offers tracking technologies from the old-school striped bar codes that are the impetus for its name to interactive kiosks and near-field sensor applications. Anyone who has ordered takeout via a touch-screen kiosk or put in a tracking code to see where a package is can immediately understand the consumer-facing applications of this technology, but the real opportunities for the stock come from businesses with an eye on inventory management or staff productivity.

This potential is evidenced by the latest Zebra earnings, which featured 44% top-line growth. That’s impressive enough, but even more substantial is the fact that net earnings were up a stunning 119% year-over-year.

Zebra is rolling up related tech players at a rapid clip to future-proof its business, too. The latest deals of note are the $290 million acquisition of Fetch Robotics in July and one for AI and asset intelligence firm Antuit.ai just this week. This comes on the heels of machine vision deals for Adaptive Vision in May and Cortexica Vision Systems in late 2019 as well as the purchase of analytics and machine learning startup Profitech in 2019.

These deals obviously cost money, but they ensure Zebra is truly evolving into a 21st century business analytics firm — a quite lucrative niche, if its plans play out. And based on the fact that shares have doubled in the last 12 months and continue to hit new all-time highs like clockwork, Wall Street seems optimistic that Zebra will deliver.

Jeff Reeves is a MarketWatch columnist. He doesn’t own any of the stocks mentioned in this article.

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