3 Stocks of Bargain Tech to Buy Before Recession Fears Take Over
This year, the equity market as a whole has been volatile due to increasing pessimism regarding the possibility of a downturn amid rising interest rates and high inflation. Worries about a global economic rebound have increased due to the ongoing Russia-Ukraine War.
Year to date (YTD), the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 8.5%, 33.8% and 19.7%, respectively. Due to the geopolitical and macroeconomic environment, the global economy has seen a significant slowdown.
Technology stocks are the worst-performing sector in the overall market sell-off of this year. Technology Select Sector SPDR Fund seeks investment results that are comparable to the Technology Select Sector Index’s price and yield performance. It has lost around 29% YTD.
However, this sell-off in the broader equity market has led to a massive correction in several technology companies’ stock prices, which were considered to be widely overvalued at the sector’s peak in 2021. Many tech stocks, despite having strong fundamentals, are now trading at attractive valuations and way below their 52 week high.
According to our opinion, Microchip Technology MCHP, ePlus PLUS GlobalFoundries GFS is one of the most undervalued stocks in the technology sector. These stocks are worth adding to your portfolio due to their solid prospects and strong fundamentals. These are some of the best bargain stocks and are likely to see a turnaround in 2023.
3 Prominent Picks
Microchip Technology: The company designs and manufactures microcontrollers and memory, analog and interface products to embedded control systems. These are low-power, small computers that can perform specific tasks.
Microchip has been able to sustain its strength in both the analog and microcontroller business. The company’s dominance in 8,16 and 32-bit microcontrollers is driving top-line growth. Strategic acquisitions like Microsemi or Atmel have increased the product range.
Microchip’s market cap is $38.5 billion, and it has a Value Score (B) of. According to the Zacks Consensus Estimate, fiscal 2023 sales and earnings will grow by 22.2% and 28.9% respectively, compared with the year-ago period. This Zacks Rank #2 (Buy), company’s shares have fallen 20.7% YTD. See more the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microchip Technology Incorporated Prices and Consensus
Microchip Technology Incorporated price-consensus-chart | Microchip Technology Incorporated Quote
ePlus: This Herndon-based company helps organizations optimize their IT infrastructures and supply-chain processes. It provides world-class IT products and professional services.
With the rise of hybrid working, the company is able to take advantage of the growing demand for work-from home hardware and software. This includes PCs and tablets as well as connectivity and security products. Apart from this, the company’s strategy of acquiring regional solution providers is helping it grow across the higher-margin IT services market.
Currently, ePlus has a Zacks Rank of #2 and a Value Score A. Zacks Consensus Estimates for fiscal 2023 sales & EPS suggest growth of 6.1% & 1.4% respectively over the year-ago period. This market capital stock of $1.2 billion has lost 18.8% of it value YTD.
ePlus Inc. Price and Consensus
ePlus inc. price-consensus-chart | ePlus inc. Quote
GlobalFoundries: The Malta, NY-based manufacturer of a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units and microelectromechanical systems, continues to benefit from its position in the global semiconductor supply chain.
This Zacks Rank #2 Zacks player is well positioned for the rising demand for pervasive silicon solutions. Another positive is its expanding global manufacturing footprint.
The Value Score for this stock with a market capitalization of $29.2 billion is B. Zacks Consensus Estimates of 2022 Revenues suggest an increase in year-overyear revenue growth of 22.7%. The consensus mark for earnings is pegged at $3.01 per share, indicating strong improvement from the year-ago quarter’s loss of 5 cents per share. This Zacks Rank #2 company’s shares have declined 17.4% YTD.
GlobalFoundries Inc. Prices and Consensus
GlobalFoundries Inc. price-consensus-chart | GlobalFoundries Inc. Quote
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Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
ePlus inc. (PLUS) : Free Stock Analysis Report
GlobalFoundries Inc. (GFS) : Free Stock Analysis Report