As many investors know, there is an age-old saying that 50% of a stock’s price movement is the result of its group. Right now, one of our hottest groups is the “Semiconductor-General” industry, which is in the top 2% of industries based on the Zacks Industry Rank and contains some of the most elite options in the market.
For individuals who stick true to the aforementioned belief, we will highlight three of the strongest and most promising stocks within this industry, in hopes of guiding investors to a stock that holds its own merit, while being carried by the merit of the stocks surrounding it.
Amtech Systems, Inc.
Amtech Systems ASYS is a capital equipment maker and a current Zacks Rank #1 (Strong Buy) stock. It has seen absurdly positive share price movement over the past month, gaining 28.5% since May 3.
On top of its prestige Zacks Rank, Amtech Systems also currently sports an “A” grade for Value in our Style Scores system. The company holds a P/B ratio of 1.29, compared to an industry average 3.35, helping to show that its being traded at a discount to its peers. It also dominates the industry in P/CF, P/E, and P/S ratios, justifying its grade within this Style Scores category.
A Zacks Rank #1 (Strong Buy) and “A” grade in Value show this stock to be a prime purchase for the value investor looking to stay ahead of the curve. Looking into the history of the stock, Amtech Systems shares tend to peak and correct in cycles of three to five years, so investors can expect to ride this wave of increase for a period of time but should be wary of eventual cyclical concerns.
Texas Instruments Incorporated
Texas Instruments TXN is also currently a Zacks Rank #1 (Strong Buy), with analyst sentiment continually trending upwards. Share prices have increased 10% in the last month, with 12 out of 12 revising analysts adjusting their EPS estimates to the upside for the next quarter.
In terms of its Style Scores, its most impressive is Growth, where it is sporting a “B” grade. Within this, its return on equity is particularly noteworthy. It currently sports an RoE of 43.7% compared to an industry average 22.1%, showing that Texas Instruments does an excellent job putting investor money to work.
Last but not least, Nvidia NVDA is also sporting Zacks Rank #1 (Strong Buy). With a current year-to-date return of 19.9%, the company has seen exceptional growth throughout the first and into the second quarter.
Similar to Texas Instruments, the company is a strong growth stock, holding an “A” grade in our Growth category. Its ROE is even more impressive than TXN’s at 52.2%. Other factors to consider include Nvidia’s strong current cash flow and projected EPS growth of 66.7% and 43.9%, respectively.
Although Nvidia boasts amazing growth numbers, its one downfall is the Value category, where it is holding an “F” grade. This suggests that the stock is being traded at a heavy premium to its intrinsic value. It holds a P/E ratio more than twice the industry average and has a hefty price tag for such consistent growth.
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