Qualcomm (QCOM) & CPS: 2 Tech Stocks To Hold In February

Summary

• Tech companies CPS and Qualcomm are among the most active stocks currently.
• CPS is debt free; and remains a market leader in key technologies spanning radar, satellite, avionics, high-speed rail, and electric vehicles.
• Qualcomm on Thursday reported a net profit of $2.4 billion in the first quarter of 2021.

US tech companies CPS Technologies Corp. and Qualcomm Incorporated have given a stellar performance like their peers in the technology sphere, despite widespread COVID restrictions.

While the former is a market leader in transportation, energy, computing, and telecommunications, the latter is a champion in wireless communications, and semiconductor and chip designing.

The stocks of these two companies have seen significant growth over the past few months, enabled by increased demands from clients across various geographies in which they operate.

In its first-quarter report of 2021, released Thursday, Qualcomm has reported record earnings compared to their performance in the corresponding period last year.

Consequently, due to their persistent positive results spanning several quarters, investors have renewed their focus on these high-performing stocks, evident from their high trade volumes in stock markets.

Here are some of the key fundamentals that worked for these technology giants.

CPS Technologies Corp. (NASDAQ: CPSH, CPSH: US)

CPS stocks were up more than 138 per cent to US$16.54 at the close of the trading day on Wednesday. In the last five days, its share value rose by nearly 132 per cent.

CPS has relatively few competitors in the business, given that it specializes in high-tech technologies involving large projects, which can be difficult for the small players to enter.

From designing components for radar, satellite, and avionics applications, to high-speed rail, electric vehicles, defence, and oil and gas, the company is a leading player in the sector.

The company earns two-thirds of its revenue from Europe and Asia, although it also holds a significant market share in the US, where it has manufacturing plants. Its revenue for the quarter ended September 26, 2020, stood at US$4.5 million. The quarterly operating profit was US$ 253,000, up from operating loss of US$ 479,000 for quarter ended September 28, 2019.

The stock also maintained consistently high trade volumes. The 30-day average was more than 3.3 billion shares, and a 50-day average was over 2.2 billion.

Other fundamentals also give the stock a positive outlook; for instance, the company is debt-free. The P/E ratio was 66.20, P/B 33.755, P/CF 81.10, and debt to equity ratio, or D/E, was 0.17.

In the Wednesday’s session, over 46.2 million shares were traded. CPS has a market cap of $219 million.

The return on equity was 25.74 percent, while the return on assets was 16.72 percent.

Qualcomm Incorporated (NASDAQ:QCOM)

Qualcomm stocks closed at US$162.30 on Wednesday, down 2.48 per cent from the previous trading session. More than 14 million shares were traded during the intraday session. The stock value rose by 4 per cent in the last five days.

Qualcomm specializes in wireless and semiconductor technologies, and chip designing, among others and has a market cap of US$184 billion. It has patented the CDMA and OFDMA technologies used in wireless communications for 4G and 3G networks. Qualcomm is also a leader in 5G technology.

The company announced a net profit of US$2.4 billion in its first quarter of 2021 on Thursday. This indicated over 165 per cent increase from the corresponding period a year ago.

Qualcomm's total revenue rose by 62 per cent to US$8.2 billion during the reported period. In Q1 of 2020, it had reported a net profit of US$925 million.

The 30-day average trade volume stood at over 7.2 billion, and the 50-day average was over 8 billion.

The company’s P/E ratio is 35.70, P/B 30.336, P/CF 31.90, and D/E 2.59.

The return on equity was 91.53 percent, and the return on assets was 14.63 percent.

It also pays a quarterly dividend of US$0.65, yielding 1.602 per cent. Dividend growth saw a 7.15 percent increase in the last five years.