The old adage in investing is to buy low and sell high. At Zacks, we believe it is vital to be able to identify stocks that possess growth or value potential, even if they do not classify as a well-known company. If invested wisely, money spent on a small-cap stock can transform into massive capital gains due to a share price explosion.
The semiconductor industry can be a reliable one, especially since these products are utilized in factories, power, communications and electronics. Many small-cap semiconductor producers have the capability to undergo massive growth which in turn, will reward its loyal shareholders.
Check out these 4 small-cap semiconductor stocks to buy now:
1. ChipMOS Technologies Ltd. IMOS
ChipMOS Technologies has a beta rating of 0.43, which means that the investment is expected to be less volatile on average. However, the stock is currently paying a massive dividend of 7.94% to its shareholders. ChipMOS Technologies scored an “A” Value grade which means that this stock might be largely undervalued by the market. Additionally, the company currently boasts a solid EV/EBITDA of 5.33, while its stock price has increased by 14.43% in the past 12 weeks. In essence, this stock has the potential to provide excellent value to shareholders who will show loyalty to this small-cap investment. ChipMOS Technologies currently stands at a Zacks Rank #2 (Buy).
2. MaxLinear, Inc. MXL
MaxLinear reported a RoE of 26.77% compared to an industrial average of 17.86%, which means that the company is more effectively creating assets from shareholder equity than its competitors. Additionally, MaxLinear has beaten their earnings projections for each of their last six operational quarters, and its share price has increased by 54.97% over the past year. MaxLinear is expected to continue this trend as its projected sales growth stands at 18.09%, while its sales/asset ratio sits at 0.84, both of which compare favorably to the industry. This means that MaxLinear is efficiently using its assets to increase sales in the near future. MaxLinear currently has a Zacks Rank #1 (Strong Buy) due to its increase in earnings estimates.
3. MagnaChip Semiconductor Corporation MX
MagnaChip possesses a small market cap of $317 million, but is projected to skyrocket in the near future. As of 60 days ago, MagnaChip’s full-year EPS estimates increased by 37.50%, while their current Cash Flow Growth stands at 52.09%. Further, MagnaChip surprised shareholders by beating their most recent earnings projections by 80%. MagnaChip also holds a 21.25 P/E ratio and Earnings Yield of 4.73%; both of these measurements are respectable among its industrial competitors. Also, the company sports a strong Price/Sales ratio of 0.45. This means that MagnaChip is only paying $0.45 for every $1 of sales the corporation earns. This company received a Zacks Rank #2 (Buy) due to adjustments to its future earnings forecast.
4. Advanced Energy Industries, Inc. AEIS
Advanced Energy ought to be considered the poster child of consistency as they have beaten their earnings projections 19 out of the last 20 quarters dating back to 2012. The company is currently outpacing its competitors, as it possesses a current Cash Flow growth of 30.06% and 29.56% RoE. Not to mention, Advanced Energy has a Net Margin of 26.92%, which means that the company is retaining a large portion of their sales and earnings. Basically, this stock has received a “B” grade for Momentum while its share price has increased by a whopping 84.31% over the past year. Now would be the ideal time to purchase this stock that currently has a Zacks Rank #2 (Buy).
Finding stocks in the right trading or investing style that is best suited for you, is one of the keys for consistently making money in the market.
In addition to that, you’ll likely find yourself with less stress, and having more fun while doing so. Plus, finding the right stocks to buy will suddenly become much easier.
Remember, the Zacks Rank remains the first step in your stock selection success, while the Zacks Style Scores are the next and final step to lock in your biggest winners. Focus in on stocks with a Zacks Rank #1 or #2. Then key in on those with a Zacks Style Score of A or B for your preferred trading style.
It truly has never been easier and more profitable to find the best Zacks Rank stocks than now.