2 tech stocks that could pop in the next 12 months

Since the start of the year, US tech stocks have experienced a brutal selloff on a range of macroeconomic and geopolitical concerns. However, due to strong demand, integration of new and modern technologies, increased corporate and government investments, the technology industry is expected to grow significantly in the coming months. Therefore, in basic voice technology stocks CTS Corporation (CTS) and Avnet Inc. (AVT) We think stockpiling might be wise. Read it.

US tech stocks rose to a three-month high, boosted by strong corporate earnings and positive economic data. of The S&P 500 index rose 1.6 percent. On Wednesday, it will be led by technology and consumer stocks. This helped reverse the damage done in the first two days of the week. The Nasdaq Composite rose 2.6% to its highest level since early May.

Despite market downturns or unprecedented global events, organizations are investing to strengthen their digital capabilities as technology advances. To keep pace with the rapidly changing business environment, investments in digitization from various sectors are expected to generate high returns for technology companies in the long run.

The global information technology market is expected to reach $13.81 trillion by 2026. 10.3% CAGR. Growing technology is expected to propel the industry forward with technological advancements and emerging technologies such as cloud computing, artificial intelligence, augmented reality, data analytics and blockchain.

Given this background, we think it might be wise to invest in quality technology stocks CTS Corporation.CTS) and Avnet Inc.Avt) using strong industrial growth characteristics.

CTS Corp.CTS)

CTS is a leading product designer and manufacturer of products that enable emotion, communication and movement. The company manufactures sensors, actuators and electronic components in North America, Europe and Asia. It also sells engineering products to customers in the aerospace/defense, industrial, medical and transportation sectors.

In June, CTS completed the previously announced cash acquisition of Ferroperm Piezoceramics from Meggitt PLC (MGGT) for 525 million Danish kroner for customary net debt and working capital adjustments and other terms and conditions of a fixed share purchase agreement.

CTS revenues increased 11.9% from a year ago to $144.98 million for the second quarter ended June 30, 2022. Operating income It grew 10.2 percent year-on-year to $22.69 million. The company’s net income rose 1339.8% to $12.59 million from the previous quarter, while its EPS was $0.39.

Analysts expect EPS to grow 30.6% year-over-year to $2.52 in fiscal 2022. The consensus revenue estimate for fiscal 2022 is $593.18 million, representing growth of 15.6% over the same period last year. The stock gained 16.8% last year and 19.6% last month.

CTS POWR standards Reflect this hopeful attitude. The company has an overall rating of B, which translates to a buy in our proprietary rating system. POWR Ratings evaluates stocks on 118 different factors, each with its own weighting.

CTS has an A rating for durability, quality and stability. in Technology – Electronics Industry, it is #3 out of 47 stocks. To view additional POWR ratings for CTS for Price, Momentum and Sentiment, Click here.

Avnet Inc. (Avt)

AVT, a technology solutions company, markets, sells and distributes electronic components. Electronic Components and Farnell are the company’s two operating divisions.

In June, AVT and Amazon Web Services (AWS) formed a new global strategic partnership agreement to help original equipment manufacturers (OEMs) deliver IoT solutions by reducing time to market. This multi-year collaboration enables Avnet’s IoTConnect Platform to offer the breadth and depth of the AWS service portfolio, resulting in a scalable, secure platform that pre-configures AWS services for application-specific use.

Also in June, the SciTech Institute, established to advance and promote the value and importance of STEM education, announced a partnership with AVT to expand SciTech’s Chief Science Officers (CSO) program to new locations in the US and internationally. .

For the third quarter ended April 02, 2022, AVT’s total revenue increased 31.9% to $6.49 billion from a year ago. Operating income rose 212.9 percent year-on-year to $274.41 million. The company’s net income rose 70.6% to $183.42 million from the previous quarter, while the company’s EPS rose 71.9% year-over-year to $1.84.

AVT’s EPS is expected to grow 10.4% annually over the next five years. The consensus revenue estimate for fiscal 2022 is $24.19 billion, representing a 23.8 percent year-over-year increase. The stock has gained 14.7% over the past year and 13.9% over the past month.

Not surprisingly, the AVT has an overall B rating, which equates to a buy in our POWR rating system. The stock also has potential for growth and value. In the same industry, it is ranked #6.

Beyond the POWR rankings I just highlighted, you can see. AVT ratings for momentum, stability and feel.

Shares of CTS were unchanged in premarket trading Thursday. Year-to-date, CTS has gained 11.47%, while the benchmark S&P 500 index has gained -12.09% over the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with an interest in investing. She majored in finance in college and is currently attending the CFA program and is a Level II candidate.

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