Against the reports of layoffs, the tech sector’s hiring activity remains robust. The U.S. Bureau of Labor Statistics job report showed that tech companies added 20,300 net new workers in June. Tech employment for the first half was 59% ahead of last year’s period.
In a recent note, JPMorgan Chase & Co. (JPM) strategists noted that some beaten-down tech stocks could be worth investors’ attention based on their attractive valuations. According to CNBC’s ‘Mad Money’ host Jim Cramer, the tech stocks might be poised for long-term recovery after the sector rallied last week.
Given this backdrop, fundamentally strong tech stocks TDK Corporation (TTDKY), Toshiba Corporation (TOSYY), and Dell Technologies Inc. (DELL) might be ideal buys now.
TDK Corporation(TTDKY)
TTDKY manufactures and sells electronic components worldwide. The company operates through its Passive Components; Sensor Application Products; Magnetic Application Products; Energy Application Products; and Other segments. The company is headquartered in Tokyo, Japan.
On June 21, TTDKY introduced its thin pattern coil to support the wireless charging of next-generation mobile devices. The thinner diameter coils, the company might add to its revenue stream.
On June 20, the company announced the establishment of a joint venture company between its subsidiary Amperex Technology Limited and Contemporary Amperex Technology Co., Limited. This might benefit the company.
TTDKY’s net sales increased 28.6% year-over-year to $15.59 billion in the fiscal year that ended March 31. Its operating income grew 49.4% from the year-ago value to $1.37 billion, while its net income attributable to TDK improved 131.4% year-over-year to $1.51 billion. The company’s net income per common share attributable to TDK increased 131.4% from its year-ago value to $3.96.
TTDKY’s consensus EPS estimate is $3.09 for the fiscal year ending March 2024, indicating a 10.9% year-over-year increase. The consensus revenue is expected to be $16.06 billion for the same period, indicating a growth of 3.5% year over year.
The stock has declined 2.2% intraday to close its last trading session at $28.39.
TTDKY’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
TTDKY is rated an A in Growth and a B in Value and Stability. Within the Technology - Hardware industry, it is ranked #3 out of 45 stocks.
To see additional POWR Ratings for Momentum, Sentiment, and Quality for TTDKY, click here.
Toshiba Corporation (TOSYY)
TOSYY, headquartered in Tokyo, Japan, offers electronic devices and storage solutions globally. It operates through Energy Systems and Solutions; Infrastructure Systems and Solutions; Building Solutions; Retail and Printing Solutions; Electronic Devices and Storage Solutions; Digital Solutions; and Other segments.
In April, it was reported that TOSYY and BT Group, along with EY, had launched a commercial quantum-secured metro network trial. This is expected to benefit the company by connecting numerous customers across London.
On March 29, TOSYY, Toshiba Digital Solutions Corporation (TDSL), and KT Corporation (KT) announced their collaboration on two pilot projects in South Korea using Quantum Key Distribution (QKD). This is expected to expand the company’s QKD business.
For the fiscal year that ended March 31, TOSYY’s net sales increased 9.3% year-over-year to $27.35 billion. Its income from continuing operations before income taxes and non-controlling interests rose 55.8% from the prior year to $1.96 billion, while net income attributable to the shareholders of the company stood at $1.60 billion, which indicates an increase of 70.8% year over year.
Analysts expect TOSYY’s revenue for the fiscal year ending March 2023 to be $24.50 billion, indicating a 3,566.1% year-over-year growth.
TOSYY has declined marginally intraday to close its last trading session at $19.60.
It is no surprise that TOSYY has an overall rating of B, which translates to Buy in our POWR Ratings system. Also, the stock has an A grade for Value and a B for Stability. It is ranked #7 in the Technology – Hardware industry.
Beyond what we’ve stated above, we have also given TOSYY grades for Growth, Momentum, Sentiment, and Quality. Get all the TOSYY ratings here.
Dell Technologies Inc. (DELL)
DELL designs, develops, manufactures, markets, sells, and supports information technology solutions, products, and services worldwide. The company operates through three segments: Infrastructure Solutions Group (ISG); Client Solutions Group (CSG); and VMware.
On June 7, DELL announced that its board of directors had declared a quarterly dividend of $0.33 per common share, payable to shareholders on July 29. This reflects upon the company’s cash generation ability.
On the same day, DELL introduced the Precision 7865 Tower, featuring the AMD Ryzen Threadripper PRO 5000 WX-Series processors. The professional workstation should add to the company’s revenue.
For the first quarter ended April 29, DELL’s non-GAAP net revenue increased 15.6% year-over-year to $26.12 billion. Its non-GAAP operating income rose 20.6% from the prior-year period to $2.14 billion. Non-GAAP net income and non-GAAP net earnings per share came in at $1.43 billion and $1.84, up 35.9% and 36.3% from the prior-year period.
Street EPS estimate for the fiscal year ending January 2023 of $7.09 reflects a rise of 14% year-over-year. Likewise, Street revenue estimate for the same year of $106.94 billion indicates an improvement of 5.6% from the prior-year period. Additionally, DELL has topped consensus EPS estimates in three of the trailing four quarters.
DELL’s stock has gained 2% over the past five days and 1.3% intraday to close its last trading session at $43.05.
This promising prospect is reflected in DELL’s POWR Ratings. The stock has an overall B rating, equating to Buy in our proprietary rating system.
DELL has an A grade for Value and a B grade for Growth and Sentiment. It is ranked #9 in the same industry. Click here to see the additional POWR Ratings for DELL (Momentum, Stability, and Quality).
TTDKY shares were trading at $28.31 per share on Wednesday afternoon, down $0.08 (-0.28%). Year-to-date, TTDKY has declined -27.67%, versus a -19.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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