President Trump’s “America first” rhetoric had been quite a dampener for the Technology Services industry. The implementation of several changes to immigration policies and H-1B work visa to create jobs and discourage outsourcing has dealt a blow to technology bigwigs of the Silicon Valley that have historically thrived on immigrants and H-1B cardholders. The effect of this has reverberated far and wide.
Although Trump’s executive order was later replaced with a narrower set of travel restrictions by the judiciary, following a slew of legal challenges over its constitutionality, it remains a bone of contention. Critics believe that efforts to thwart immigration will largely threaten the founding pillars of the industry – innovation, human capital and startup formation. The new set of guidelines for awarding H-1B visa are also perceived as deterrents for the industry as a whole.
Amid such upheavals, the Technology Services industry grossly underperformed the benchmark S&P 500 Index since Trump’s win, with an average return of 5.2% compared with a gain of 8.6% for the latter.
As the industry appears to be in doldrums at present, let us cherry pick four Technology Services stocks based on a solid Zacks Rank and a Value Growth Momentum Score (VGM Score) of ‘B’ or better. Our research shows that stocks with a VGM score of ‘A’ or ‘B,’ when combined a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best investment opportunities for investors.
4 Industry Picks with Solid Potential
Amdocs Limited DOX: Formed in 1988, Amdocs is a leading provider of customer relationship management and billing software to communications service providers. The company enables service providers to capture the world of digital immediacy by operating across digital dimensions for personalized and omni-channel experiences. At the same time, it helps clients to be data empowered based on insight-based and predictive analytics, and achieve service agility for faster rollout of new technologies and hybrid network services.
With a Zacks Rank #2 and a VGM Score of ‘B’, Amdocs has long-term earnings growth expectation of 7.5%. The company has been outperforming the industry since Nov 9, 2016, with an average return of 7.9%.
Unisys Corporation UIS: Based in Blue Bell, PA, Unisys specializes in securing client operations, increasing efficiency of data centers, enhancing support to end users and constituents and modernizing their enterprise applications. The company is rationalizing its services and solution portfolio by shifting its offerings to cloud-based and software-as-a-service delivery models.
Unisys has a Zacks Rank #2 and a VGM Score of ‘B.’ The company has been outshining the industry since Nov 9, 2016, with an average return of 7.1%.
Science Applications International Corporation SAIC: Headquartered in McLean, VA, Science Applications serves the U.S. federal, state and local government agencies as well as foreign governments. Since its inception in 1969, the company has utilized its domain knowledge to solve critical problems in areas such as national security, energy and the environment, critical infrastructure and health.
Science Applications has a Zacks Rank #1. With a VGM Score of ‘A,’ the company has long-term earnings growth expectation of 5%. However, the company has been lagging the industry since Nov 9, 2016, with an average decline of 2.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wix.com Ltd. WIX: Headquartered in Tel Aviv, Israel, Wix.com is a leading cloud-based web development platform with more than 102 million registered users worldwide.
With a Zacks Rank #2 and a VGM Score of ‘B,’ the company has long-term earnings growth expectation of 20%. The company has excelled the industry since Nov 9, 2016, with an average return of 79.6%.
Technology companies have widely rebutted Trump’s immigration policies and have argued, “Global mobility is critical to businesses whose customers, suppliers, users, and workforces are spread all around the world.” It remains to be seen how the administration is likely to counter these staunch rebuttals. Amid such a challenging environment, investors could well benefit from stocks that are backed by solid fundamental strength and promise healthy returns.
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Unisys Corporation (UIS): Free Stock Analysis Report
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