Phase 2: Four Top-Rated Growth Stocks for Triple Digit Gains or More
2022 has been a brutal year for the tech-heavy NASDAQ. In fact, 2022 was the worst start for the NASDAQ since January 2008 when the stock market was in the depths of the financial crisis. The NASDAQ fell deep into correction territory, crating 15% over a three-week span. By early March, it had fallen more than 20% – officially entering a bear market.
When the NASDAQ corrected, it dragged the majority of tech stocks – both good and bad – right down with it. In fact, more than half of the stocks in the NASDAQ have tumbled 40% or more from their peak levels of last year.
I know the selling has been gut-wrenching for many, but that selling has also opened up exciting new opportunities in four select tech stocks. These stocks are stretched across various industries with significant growth potential. They’re small, and they’re all poised to disrupt their respective industries. I found them with my proprietary algorithms, which track eight key fundamental factors: sales growth, operating margin growth, earnings growth, earnings momentum, earnings surprises, analyst earnings revisions, cash flow and return on equity. They earn high marks in my proprietary system and are great buys right now.
Let’s take a closer look!
Top Stock #1: Axcelis Technologies
Axcelis Technologies (ACLS) has provided equipment and services to leading semiconductor companies around the world for more than 40 years. Specifically, the company offers ion implant platforms that better optimize the semiconductor fabrication process. Axcelis Technologies’ Purion platform has been particularly popular, as it addresses many of the challenges that companies face during semiconductor fabrication.
Axcelis Technologies has more than 800 technology patents and 3,000 tools in use around the world. In fact, its platform is used in 32 countries. This isn’t surprising considering the company tailors its platforms to meet its customers’ specific needs and fabrication goals. Axcelis Technologies’ commitment to its customers has also added handsomely to its top and bottom lines – which is one of the reasons why the company was recently added to Forbes’ list of America’s Best Small Companies.
For its fiscal year 2021, Axcelis Technologies achieved record revenue, which meant the company also reached its goal for $650 million in revenue two years quicker than expected. Full-year revenue rose 40% year-over-year to $662.43 million, up from $474.56 million in 2020. Product revenue accounted for $634.45 million, while services revenue accounted for $27.98 million. Full-year earnings soared 97.3% year-over-year to $2.88 per share, topping estimates for $2.68 per share.
For its fourth quarter, Axcelis Technologies reported earnings of $1.05 per share on $205.68 million in revenue. That represented 68.3% year-over-year revenue growth and 144.2% year-over-year earnings growth. The consensus estimate called for fourth-quarter earnings of $0.84 per share and revenue of $190.04 million.
Thanks to the strong quarterly results, Axcelis Technologies noted that it anticipates first-quarter earnings of about $0.92 per share and revenue of about $193 million. That represents 92% year-over-year earnings growth and 45.3% year-over-year revenue growth.
Top Stock #2: Kulicke & Soffa Industries, Inc.
Kulicke & Soffa Industries, Inc. (KLIC) operates in the lucrative semiconductor industry. The company is known for developing interconnect solutions, which boost performance and power efficiency, as well as reduce formfactor and promote assembly excellence, in semiconductor devices. Simply put, it is a global leader in making and supplying the equipment for manufacturing semiconductors.
Its products are used in several markets, including consumer, automotive, computing, communications and industrial. A few of the company’s products are ball bonders, wafer level bonders, wedge bonders, capillaries and dicing blades. Overall, Kulicke & Soffa’s products are used to package and assemble electronic devices.
In recent years, the demand for semiconductors, or “microchips,” has skyrocketed. And the world has been suffering from a historic chip shortage that’s impacting virtually every single industry. This boom is due to the fact that nearly everything in our lives now has chips inside. Couple this with the fact that the increasing demand for electric vehicles (EVs), and their reliance on microchips, KLIC is poised to be the biggest winner as chipmakers look to ramp up production. This is why I consider KLIC as the ultimate “picks and shovels” play for the soaring semiconductor demand.
So, it’s no surprise that KLIC released better-than-expected earnings for its first quarter in fiscal year 2022. First-quarter earnings soared 154.7% year-over-year to $138.8 million, or $2.19 per share. The consensus estimate called for first-quarter earnings of $1.90 per share, so KLIC posted a 15.3% earnings surprise. The company also reported total first-quarter revenue of $460.9 million, or a 72.1% year-over-year increase.
Looking forward to its second quarter in fiscal year 2022, KLIC expects revenue of about $380 million and earnings per share of about $1.45. That compares to revenue of $340.2 million and earnings for $1.26 per share in the second quarter of 2021.
Top Stock #3: Synapitcs, Inc.
Synapitcs, Inc. (SYNA) is primarily a semiconductor company – and there’s a strong likelihood that you utilize the company’s technology on a daily basis. In fact, there’s a good chance that you’re using Synaptics’ technology to read this Flash Alert right now.
The reality is that Synaptics dominates the touchscreen and touchpad market for electronics devices like smartphones, tablets and PCs, as well as has a vast portfolio of human interface solutions aimed at creating a better user experience. Its solutions enable wireless connectivity, deliver ultra-high-resolution graphics, provide clear audio and voice processing, enable energy-efficient AI solutions, boost home entertainment and multimedia solutions, enable secure fingerprint identification, power smart cameras and so much more!
Considering that Synaptics’ technology and solutions are vital to our day-to-day experiences, it’s no wonder that Synaptics partners with leading tech companies. The company collaborates with Google on its android devices, as well as its Chrome hardware and software; with Intel on its chip designs for biometrics, display and touch; with Microsoft on its Windows Input and Windows Hello; and with Qualcomm on its designs for mobile devices.
Synaptics also partners with virtually all the top original equipment manufacturers (OEMs) and OLED and LCD display manufacturers. And thanks to strong demand for its solutions and its strategic partnerships, Synaptics has shipped more than five billion units – and it shows no signs of slowing down any time soon.
During its second quarter in fiscal year 2022, Synaptics achieved record earnings of $132.8 million, or $3.26 per share, and revenue of $420.5 million. That represented 41.7% year-over-year earnings growth and 17.6% year-over-year revenue growth. Analysts were expecting earnings of $3.12 per share and revenue of $422.9 million.
Thanks to a strong backlog and continuing demand, Synaptics expects third-quarter revenue between $450 million and $480 million, which compares to revenue of $325.8 million in the third quarter of 2021. Given the strong outlook, analysts have increased third-quarter earnings estimates by 34% in the past month. As you know, positive analyst revisions typically precede future earnings surprises.
Top Stock #4: Wipro Limited
Wipro Limited (WIT) provides information technology services by utilizing analytics, robotics, cognitive computing, emerging technologies, the cloud and hyper-automation. The company operates primarily through three businesses, including IT Services, IT Products and India State Run Enterprise Solutions.
On January 12, Wipro Limited released mixed results for its third quarter in fiscal year 2022. Wipro reported third-quarter revenue of $2.7 billion and earnings per share of $0.07, which represented 29.6% year-over-year revenue growth and 4.2% year-over-year earnings growth. The analyst community was expecting earnings of $0.08 per share on $2.68 billion in revenue.
While the earnings results fell short of expectations, Wipro noted that it was the fifth-straight quarter of strong revenue growth, as well as solid order bookings. The company added seven brand-new customers with more than $100 million revenue in the past 12 months. Wipro anticipates that it will build off this momentum going forward.
For the fourth quarter in fiscal year 2022, Wipro expects revenue between $2.69 billion and $2.75 billion. That translates to 20.6% to 23.4% year-over-year revenue growth.
The Bottom Line
The bottom line is that Axcelis Technologies (ACLS), Kulicke & Soffa Industries, Inc. (KLIC), Synapitcs, Inc. (SYNA) and Wipro Limited (WIT) have massive upside potential written all over them. This is why now is a great time to buy, because once the market rebounds – and it will – these four stocks are sure to take off. For my latest advice, please visit the Accelerated Profits Portfolio.
[Editor’s Note: The Portfolio Grader ratings and buy limits are updated on a weekly basis and are subject to change.]