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Tip Ranks
Moving to 5G could fuel a rally in these 3 stocks
The tech world is in the midst of a shock. Since late 2017, new 5G wireless technology has been moving forward, bringing with it a combination of faster connection speeds and lower latency and the promise of big changes in how we connect to the online world. New technologies – connected cars and agile IoT come to mind – wouldn’t be possible without 5G. Investment research firm HSBC Global, in a recent report on the advent of 5G technology, questions whether new networking is a boom or a failure. Specifically, HSBC asks why 5G has been disappointing so far. Industry expert Professor William Webb notes that the rollout of 5G hasn’t lived up to the hype, even in Asia, where networks are more extensive and better integrated. He describes the technology as “evolutionary, not revolutionary”. Webb points out several areas where 5G clearly needs further evolution: expanding networks, which will require further tower and cell construction; smoother transitions between cells; and improved functionality once the devices are connected. In his view, 5G is a beginning rather than an end. Commenting on Webb’s views and technology in general, HSBC telecommunications manager Neale Anderson writes: “[We] I see it as a shame (albeit sadly unavoidable) that 5G has been rushed to market … The bar will be further raised by mmWave services, which have been launched in the US and recently in Asia in Japan. We see it as “real” 5G and expect it to open, albeit slowly, new opportunities for operators. “If 5G is disappointing or overwhelming in the short term, in the long term it is here to stay – and that means some actions they will increase with the expansion of 5G. Wall Street analysts have been busy finding those stocks and the TipRanks database has the scoop. Here are three: Inseego Corporation (INSG) The first, Inseego, is a mobile and wireless hotspot company. As you can imagine, the company has earned direct from the move to an increase in remote work and virtual offices. The stock is up 27% this year, even after accounting for high volatility in April and August. has a direct concern in 5G. As a wireless provider, the company cannot afford to ignore new technology and is directly involved in the development and marketing of 5G routers for home use. Inseego has a partnership with It continues with Verizon on the network and hardware and is also working to expand its hotspots for IoT uses. The company hasn’t ignored the internals of the devices and works with Qualcomm on advanced 5G router chips. Like many network providers, Inseego performed financially. Quarterly revenue posted sequential earnings through 2020, with Q3 over $ 90 million at the top. EPS in the third quarter showed a loss of 6 cents; the loss was considered normal, as Inseego, again like many other tech companies, typically shows a net loss per share. The important point for EPS was that this was the smallest loss of its kind in two years. Analyst Lance Vitanza, in his coverage of shares for Cowen, writes, “As the company continues to see significant demand for legacy 4G products, its second-generation 5G product suite continues to grow … Inseego is positioned to profit from the advent of 5G, a technology that is estimated to generate $ 500 billion of GDP in the United States and that will kickstart more traditional upgrades of existing mobile hot spots from 4G to 5G. ”In line with these comments, the analyst gives the stock an Outperform (ie Buy) rating. Its price target, at $ 13.50, indicates room for 44% growth in 2021. (To see Vitanza’s track record, click here) Overall, the Inseego holds an analyst consensus moderate buy rating, based on 6 reviews split into 4 buys and 2 holds. Meanwhile, the average price target, $ 13.17, suggests it has upside potential. by 41% in the year to ve nire. (See INSG stock analysis on TipRanks) Amdocs Limited (DOX) Software company Amdocs has built a strong reputation in the communications and media niche, while remaining under the radar compared to its competitors. In recent months, Amdocs has expanded its operations to 5G through the acquisition of Openet, a telecommunications service provider for network marketing and analytics. Openet bills itself as “ built for 5G ” and this acquisition, worth $ 180 million, will lead Amdocs to lead the 5G network. Meanwhile, a look at Amdocs’ recent performance shows that the company holds a solid position in the software universe. The company’s revenues have barely survived the crown crisis, remaining between $ 1.03 and $ 1.05 billion for the past four quarters. Earnings have gone even better; 3Q20 earnings per share of $ 1.17 are the company’s highest in over two years. Despite solid financial performance, Amdocs shares have not yet fully recovered from the mid-winter market crash. The stock has fallen 10% year to date, JPM analyst Jackson Ader believes the stock’s relatively low price represents a clear opportunity for investors. “As 5G adoption begins to grow and revenue in North America stabilizes, we believe the time has come to step into this value name that has significantly delayed our reach and market this year … we believe that 5G is beneficial, improving cash flow conversion and a potential value rotation guarantees an upgrade to overweight, “noted Ader. Along with that overweight (i.e. buy) update, Ader sets a one-year price target of $ 75, suggesting a 17% upside for the stock. (To see Ader’s track record, click here) Overall, with 3 recent purchases and 1 suspension, Amdocs gets a strong buy rating from analyst consensus. The stock sells for $ 63.97 and the median price target is $ 76, slightly more bullish than Ader and implies a ~ 19% upside. (See Amdocs stock analysis on TipRanks) Tower Semiconductor (TSEM) Last but not least is Tower Semiconductor, a manufacturing company in the chip industry. Fabs are a vital link in the semiconductor industry, as many of the great chip designers don’t actually manufacture their own products – they design, prototype, and outsource mass production. Tower is one of the serial manufacturers, making chips for big names among the big semiconductor companies, including Broadcom, Intel and Samsung. Tower is heavily invested in 5G, producing a range of chips for 5G-enabled devices, including everything from phones to the data centers. As 5G networks expand and end users begin the process of switching to enabled devices, Tower is well positioned to make money. Regardless of the big chip companies getting the lion’s share of the new business, Tower will be there: managing the manufacturing plants. It’s an enviable niche at a time when the market is starting to change at an accelerating pace. The combination of solid foundations and good prospects can be seen in the revenue and earnings prospects. On the top row, income has remained stable during this pandemic year, while on the bottom row, EPS is expected to start turning up again in the fourth quarter of this year. Needham analyst Rajvindra Gill is optimistic about Tower’s forward path. Evaluate the stock as a buy along with a price target of $ 30, suggesting a 30% rally over the one-year horizon. (To see Gill’s track record, click here) Supporting his position, Gill writes: “We expect robust growth in ’21 given our expectations of doubling the 5G smartphone market and an increase in RF content by 40- 60% … [TSEM] like our flagship low-cap 5G game, as we believe it is particularly well positioned to benefit from the 5G cycle (both on the smartphone and infrastructure side). “All in all, Tower’s Strong Buy analyst consensus rating is unanimous, supported by 3 recent buy reviews. The stock has an average price target of $ 27.67, which implies a 20% upside over price. stock market value of $ 23.08. (See TSEM Stock Analysis on TipRanks) To find good ideas for 5G stocks trading at attractive valuations, visit TipRanks “Best Stocks to Buy, A Newly Launched Tool That Combines All Equity Insights by TipRanks. Disclaimer: The views expressed in this article are solely those of featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investments.
