3 Tech Stocks To Get Bullish On Right Now

Regardless of the Fed’s repeated interest rate increases, the persistent four-decade high inflation has shown no signs of slowing, prompting fears of more aggressive interest rate hikes. Federal Reserve Chairman Jerome Powell said that failing to restore price stability would be a “bigger mistake” than pushing the U.S. into a recession and signaled to keep moving the interest rates higher in the months ahead.

Bank of America chief U.S. economist Michael Gapen forecasts a mild recession starting in the second half of 2022 and said, “We have to curb things domestically to help us get where we want to go on inflation.” An increase in interest rates affects tech stocks since the industry is heavily dependent on debt.

However, the rising dependency on technology products and solutions, the emergence of advanced technologies, and increased corporate and government spending in this space should drive the industry’s long-term growth. According to Gartner, worldwide IT spending is projected to reach $4.4 trillion in 2022, indicating an increase of 4% from last year.

Given the industry’s long term-prospects, we think it could be wise to add fundamentally sound technology stocks Cisco Systems, Inc. (CSCO), CTS Corporation (CTS), and AstroNova, Inc. (ALOT) to your portfolio now.

Cisco Systems, Inc. (CSCO)

CSCO designs, manufactures, and sells Internet Protocol-based networking and other communications and information technology products. In addition, it provides infrastructure platforms, including networking technologies of switching, routing, wireless, and data center products.

On July 21, 2022, the company launched a new Webex Wholesale Route-to-Market (RTM) for Service Provider partners to address the evolving needs of SMBs. The new sales model includes a single commercial agreement with each partner and a self-service platform for Service Providers to deliver managed services for Webex and offer agility, scalability, and flexibility to create their co-branded offers. This might help SMBs thrive in hybrid workspaces.

CSCO’s total revenue increased marginally year-over-year to $12.83 billion for the fiscal third quarter ended April 30, 2022. The company’s operating income grew 4.2% year-over-year to $3.61 billion, while its non-GAAP net income came in at $3.63 billion, representing a 3.5% year-over-year increase. Also, its non-GAAP EPS came in at $0.87, up 4.8% year-over-year.

The consensus EPS estimate of $3.36 for fiscal 2022 represents a 4.2% improvement year-over-year. The consensus revenue estimate of $51.21 billion for the current year represents a 2.8% increase from the same period last year. The company has an excellent earnings surprise history, as it surpassed the consensus EPS estimates in each of the trailing four quarters.

It has gained 2% over the past month to close the last trading session at $44.46.

CSCO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Quality. Within the Technology – Communication/Networking industry, it is ranked #8 out of 53 stocks. Click here to see the other ratings of CSCO for Growth, Value, Momentum, Stability, and Sentiment.

CTS Corporation (CTS)

CTS designs, manufactures, and sells sensors, connectivity components, and actuators primarily to original equipment manufacturers (OEMs) and supplies for the aerospace and defense, industrial, medical, telecommunications, transportation, and IT markets.

On June 30, 2022, CTS acquired Ferroperm Piezoceramics. With this acquisition, the company diversified its operations in Europe, enabling it to accelerate its long-term growth prospects.

For the fiscal first quarter ended March 31, 2022, CTS’ sales increased 15% year-over-year to $147.69 million. The company’s net earnings increased 68.8% year-over-year to $20.24 million, while its adjusted EBITDA grew 35% from its year-ago value to $34.70 million. Also, its adjusted EPS came in at $0.67, representing an increase of 45.7% year-over-year.

For the quarter ended June 30, 2022, CTS’ EPS and revenue are expected to increase 19.9% and 12.8% year-over-year to $0.62 and $146.18 million, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. The stock has gained 16% over the past nine months to close the last trading session at $37.46.

CTS’ POWR Ratings reflect these…

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