From electronics to satellites, online stores to semiconductors, there is plenty of upside to be had in the tech sector. Let’s take a look at five of the most futuristic such investments and see how their stats are shaping up.
Descartes Systems Group (TSX:DSG)(NASDAQ:DSGX)
Arguably the top network and logistics tech stock on the TSX Index, Descartes Systems Group’s one-year returns of 34.7% beat the Canadian software industry for the same period. If you’d have bought this stock three years ago, it would have grown your investment by 100%; if you had bought five years ago, your returns would have been 222.9%. A solid ticker, its one-year past earnings growth of 16.4% matched the software industry exactly.
The audio electronics stock of the future, Knowles saw one-year returns of 59.4% and a one-year past earnings growth rate of 909.2%, easily beating a negative five-year average past earnings growth.
Low debt at 14.1% of net worth and acceptable valuation (see a P/E of 26.3 times earnings and P/B of 1.4 times book) make for a solid buy, and though a 2.1% expected annual growth in earnings is minimal, Knowles is a niche stock with a large market share in a fast-growing field.
One-year returns of 23.9% demonstrate that the ubiquitous online retailer can still outperform its peers, while a one-year past earnings increase by 232.1% indicates that the sector still has considerable room for growth.
Valuation is normal for a FAANG stock, with a P/E of 90.1 times earnings and P/B of 21 times book meeting a 26.6% expected annual growth in earnings to make for a risky but potentially gravity-defying investment.
Your go-to American semiconductors stock with exposure to the billion dollar gaming industry, Nvidia knows how to make wise use of shareholders’ funds, with a past-year ROE of 44% signifying a high-quality stock, and a future ROE of 31.1% suggesting a positive future performance.
With a P/E of 27.6 times earnings and P/B of 12.2 times book, it’s better value than the previous stock on this list, and its dividend yield of 0.34%, while small, is made a little more appetizing by a solid track record, characterized by a one-year past earnings growth rate of 36.1% and five-year average of 49.5%.
Maxar Technologies (TSX:MAXR)(NYSE:MAXR)
One of the hottest tech stocks on the TSX Index bar none, Maxar Technologies is an investment for the future. Operating in space and satellite systems, earth imaging, and geo spatial information, this is the ticker to snap up if you’re into flying tech and cutting-edge research.
More shares have been bought than sold by Maxar Technologies insiders in the past three months, though its stock is still undervalued, trading at several times below its future cash flow value and with a P/B ratio of 0.4 times book at writing. A dividend yield of 0.84% and 125.9% expected annual growth in earnings makes for an exciting investment.
The bottom line
Descartes Systems Group is perhaps the perfect example of what a growth stock in the tech section of the TSX Index looks like at the moment, with its P/E of 92.9 times earnings and P/B of 5.4 times book fairly typical of an outperforming stock, while its 27% expected annual growth in earnings indicates that shareholders are likely to be rewarded by correspondingly higher share prices over the next one to three years.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Amazon and NVIDIA. Nvidia and Maxar Technologies are recommendations of Stock Advisor Canada.