For Immediate Release
Chicago, IL – November 8, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include LM Ericsson ERIC, Nokia Corp. NOK, Comtech Telecommunications Corp. CMTL, Juniper Networks Inc. JNPR and Ubiquiti Networks Inc. UBNT.
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Here are highlights from Wednesday’s Analyst Blog:
Will the Bull-Run of Wireless Equipment Makers Continue?
U.S. stock markets have remained highly volatile so far this year. Inflationary expectations, concern of higher interest rate, imposition of tariffs resulting in a looming trade war and several geopolitical conflicts are the primary reasons behind the market instability. However, the wireless equipment industry maintained its bull run even under these foreboding circumstances, surprising many investors.
Year to date, the wireless equipment industry has gained more than 12.6%, outpacing the Computer and Technology sector’s growth of 2.3%. Notably, the wireless equipment industry is part of the Computer and Technology Sector. Moreover, growth of wireless equipment industry is way ahead of the 1.8% gain recorded by the benchmark S&P 500 index.
Strong Wireless Infrastructure Market
With rapid growth in video and other bandwidth-intensive applications, the wireless industry participants are making considerable investments in LTE, broadband and fiber in order to provide additional capacity and ramp up Internet and wireless networks. The LTE network has the highest penetration rate of 91% in the North American region. This in turn will help wireless equipment manufacturers.
The impending 5G boom is likely to propel the wireless industry to newer heights. The success of 5G technology hinges on substantial investments to upgrade infrastructure in the core fiber backhaul network to support anticipated growth in data services.
In this regard, Internet of Things (IoT) has the potential to emerge as the number-one factor for future growth in the space. Statista’s 2018 report on global telecom estimates that global telecom services revenues will reach around $1.5 trillion in 2019.
Additionally, the corporate tax rate has been lowered from 35% to 21%., marking the its lowest in 78 years. Trump’s tax cut resulted in a huge windfall for wireless operators. The carriers can utilize this money for 5G network R&D and its deployment. This will naturally bolster demand for wireless equipment.
U.S. Tariffs on Chinese Imports
Trump administration is deeply concerned about China’s drive to unseat the United States as the primary developer and supplier of products in the fields of high-tech artificial intelligence, semiconductors, quantum computing and various other digital technology driven sectors.
So far, the U.S. government has imposed tariffs worth of $250 billion on Chinese goods. Most of these products fall in high-tech industrial sectors. U.S. companies that rely on Chinese imports are unhappy about the move as it will raise prices of wireless equipment and several electronics products for the IT sector. However, a hike in product prices will certainly help wireless equipment manufacturers.
Performance of Major Wireless Equipment Makers
Year to date, stock price of seven major wireless equipment manufacturers, LM Ericsson, Nokia Corp., Comtech Telecommunications Corp., Juniper Networks Inc. and Ubiquiti Networks Inc. outperformed the benchmark S&P 500.
A growing U.S. economy speeds up the demand for real-time voice, data, and video manifold. The escalation in demand has encouraged wireless service providers to undertake large network extensions while upgrading plans. This in turn has provided a boost to the demand for telecom infrastructure developers, particularly wireless equipment makers.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Ericsson (ERIC) : Free Stock Analysis Report
Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report
Ubiquiti Networks, Inc. (UBNT) : Free Stock Analysis Report
Comtech Telecommunications Corp. (CMTL) : Free Stock Analysis Report
Nokia Corporation (NOK) : Free Stock Analysis Report
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