Tech Titans: The strategy that beat the S&P 500 by 950% over the last decade
In the decade spanning from 2013 to now, tech stocks have led the pack in terms of delivering returns to investors, helping push the broader market towards a series of all-time highs with double- and sometimes even triple-digit yearly gains.
During this period, being heavily invested in growth has been the fastest route towards building wealth in the stock market.
However, those who navigated the tumultuous pandemic-induced crash of 2020 and the bear market of 2022 are well aware that indiscriminate investment in such stocks does not always ensure success.
That's why finding the top tech stocks in the market is one of the greatest keys to success - particularly as the market expects the Fed to start lowering interest rates as early as next year.
But amidst the cacophony generated by a multitude of news and data, how does one skillfully navigate through it all?
To solve this issue, we have created our flagship ProPicks Tech Titans strategy. Using state-of-the-art AI models, ProPicks cuts through the noise to deliver you only the cream of the crop in stock-picking.
Historical data shows that our strategy would have crushed the S&P 500 over the last decade by an impressive 950%, as shown in the chart below:
Source: InvestingPro ProPicks
Featuring current industry leaders, as well as rapidly emerging businesses, each boasting impressive metrics and innovations, our 'Tech Titans' strategy explores the most exciting tech opportunities in the market, highlighting 15 companies on the cutting edge of the sector.
Acknowledging the tech industry's fast pace, our AI algorithms consistently monitor and update each pick on a monthly basis, ensuring the most current and promising tech investments are always at the forefront.
Let's take a deeper look at three of the stocks highlighted within the strategy as of now, namely EPAM Systems, Allegro MicroSystems, and Photronics , which are covered below in detail.
InvestingPro users can see the full strategy - along with the other five ProPicks strategies - on our ProPicks gallery page.
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1. EPAM Systems (EPAM)
InvestingPro Health Label: Great InvestingPro Fair Value: Undervalued (30.3% Upside) Forward P/E Ratio: 31.5x Dividend Yield: 0.0%
EPAM Systems (NYSE:EPAM) provides digital platform engineering and software development services worldwide.
Renowned for its expertise in complex software engineering, EPAM works across various industries, serving financial services, travel and consumer, software and hi-tech, business information and media, life sciences, and healthcare.
Shares are up 19.4% in the past month and down 21% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, EPAM Systems is Fairly valued with 2.4% Upside.
Most recently, in November, Piper Sandler upgraded EPAM Systems to Overweight from Neutral.
Key recent news
In November, EPAM Systems reported Q3 earnings of $2.73 per share on revenue of $1.15 billion. Analysts were looking for $2.56 earnings on revenue of $1.14B.
For fiscal 2023, the company forecasted EPS of $10.31-$10.39, versus the consensus of $10.03.
2. Allegro MicroSystems (ALGM)
InvestingPro Health Label: Great InvestingPro Fair Value: Undervalued (30.4% Upside) Forward P/E Ratio: 20.8x Dividend Yield: 0.0%
Allegro Microsystems (NASDAQ:ALGM) designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems.
The company sells its products to original equipment manufacturers and suppliers primarily in the automotive and industrial markets through its direct sales force, third-party distributors, independent sales representatives, and consignment.
Shares are up 5.9% in the past month and down 9.1% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Allegro MicroSystems is Undervalued with 40.9% Upside.
Most recently, in September, BofA Securities initiated coverage on Allegro MicroSystems with a Neutral rating. In July, Wolfe Research started coverage on the stock with a Peerperform rating.
Key recent news
In November, Allegro MicroSystems reported Q2 earnings of $0.40 per share on revenue of $275.51 million. Analysts were looking for $0.37 earnings on revenue of $274.99M.
In October, Allegro MicroSystems completed the acquisition of Crocus Technology, a leader in advanced TMR sensor technology, for $420M in cash. This acquisition accelerates Allegro’s TMR roadmap and strengthens its leading position in the magnetic sensing market.
3. Photronics (PLAB)
InvestingPro Health Label: Great InvestingPro Fair Value: Undervalued (46.5% Upside) Forward P/E Ratio: 11.2x Dividend Yield: 0.0%
Photronics (NASDAQ:PLAB) specializes in the manufacture and sale of photomask products and services. Photomasks, integral in the production of integrated circuits and flat panel displays (FPDs), are essential tools used to transfer circuit patterns onto semiconductor wafers, FPD substrates, and a variety of electrical and optical components.
Shares are up 14.4% in the past month and 25.9% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Photronics is Undervalued with 32.1% Upside.
Most recently, in May, Northland Capital Markets downgraded Photronics to Market Perform from Outperform.
Key recent news
In September, Photronics reported Q3 earnings of $0.51 per share on revenue of $224.2M. Analysts were looking for $0.52 earnings on revenue of $230M.
The company also provided its guidance for Q4/23, expecting EPS of $0.51-$0.59, versus the consensus of $0.54, and revenue of $222-$232M, versus the consensus of $231M.
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*Readers of this article can enjoy an exclusive 10% discount on our annual Pro+ plan with coupon code TT1, and a similar discount of 10% on the bi-yearly Pro+ plan by using coupon code TT2 at checkout!
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