SWCH to PLAB: Should you consider these 5 tech stocks under US$50?

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Highlights 

  • Switch, Inc. (NYSE: SWCH) stock has a P/E ratio of 841.5 and a dividend yield of 0.62%.
  • Photronics, Inc. (NASDAQ: PLAB) reported a 28% revenue growth YoY at 204.5 million for the fiscal second quarter ended May 1, 2022.
  • Richardson Electronics, Ltd. (NASDAQ: RELL) stock has a P/E ratio of 17.17. Its stock grew 76.51% in one year. 

The S&P 500 information technology sector index fell around 20% this year. High inflation and the tightening of monetary policy have built pressure on technology stocks. Despite better-than-expected quarterly results, technology stocks have been wobbling. 

The growing strength of the US dollar due to rate hikes are creating a major headwind for the tech firms. The US Dollar Index grew to its highest level in May this year since 2002. Here we discuss five technology stocks priced under US$50, with strong one year and YTD gains.

Renren Inc. (NYSE: RENN)

Closing price on June 2, 2022: US$28.47
Return in one year: 130.15%

Beijing-based Renren Inc runs a used automobile business. Besides selling used cars, it offers financing products to customers. 

For the fiscal ended December 31, 2021, its revenue was US$32.2 million compared to US$18.1 million in the previous fiscal. The net income attributable to the company came in at US$13.66 million compared to the net loss of US$19.22 million in fiscal 2021. 

The stock has a market capitalization of US$702.19 million. The stock traded in the range of US$29.60 to US$9.14 in the last 52 weeks.

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Tower Semiconductor Ltd. (NASDAQ: TSEM)

Closing price on June 2, 2022: US$48.43
Return in one year: 83.59% 

The Haemek, Israel-based company is a pure-play semiconductor foundry. It manufactures semiconductors and customized integrated circuits (ICs) for customers. Its ICs are used in consumer electronics, personal computers, automotive, medical, and industrial devices.

For the three months ended March 31, 2022, its revenue was US$421 million versus US$347.2 million in the same quarter of 2021.

The net profit of the company was US$54.03 million or US$0.49 per diluted share compared to US$28.32 million or US$0.26 per diluted share in the same quarter of 2021.

With a market capitalization of US$5.26 billion, the stock has a P/E ratio of 30.2 and the forward P/E ratio of 23.40. 

The stock traded in the range of US$49.13 to US$25.55 in the last 52 weeks.

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Switch, Inc. (NYSE: SWCH)

Closing price on June 2, 2022: US$33.74
Return in one year: 69.72%

Switch Inc is a technology infrastructure company engaged in designing, constructing, and operating large scale data centers. Las Vegas, Nevada-based Switch has developed patented technologies that are redefining the data center industry.

The company earned a revenue of US$164.6 million for the quarter ended March 31, 2022, compared to US$130.87 million for the same quarter a year ago.

Its net income was US$23.9 million or US$0.08 per diluted share compared to US$24.4 million or US$0.09 per diluted share for the same period in 2021.

With a market capitalization of US$5.07 million, the stock has a P/E ratio of 841.5 and a forward P/E ratio of 177.58. Its dividend yield is 0.62%, and its annualized yield is 0.21%. 

The stock traded from US$33.84 to US$19.25 in the last 52 weeks.

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Photronics, Inc. (NASDAQ: PLAB)

Closing price on June 2, 2022: US$22.59
Return in one year: 74.17%

Photronics manufactures photomasks or photographic quartz plates containing microscopic images of electronic circuits. The Brookfield, Connecticut based company’s revenue comes from the products designed for integrated circuits production.

For the second quarter of fiscal 2022 ended May 1, 2022, its revenue was US$204.5 million, up 28% YoY. The net income attributable to Photronics was US$29.8 million or US$0.49 per diluted share compared to US$10.5 million or US$0.17 per diluted share in Q2, 2021.

The integrated circuit (IC) revenue was US$145.8 million, up 30% YoY, and Flat panel display (FPD) revenue was US$58.7 million, up 23% over the same quarter the previous year.

With a market capitalization of US$1.37 billion, the stock has a P/E ratio of 14.95 and a forward P/E ratio of 11.89. The stock traded in the range of US$22.74 to US$11.65 in the last 52 weeks.

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Richardson Electronics, Ltd. (NASDAQ: RELL)

Closing price on June 2, 2022: US$14.88
Return in one year: 76.51%

Lafox, Illinois-based Richardson Electronics Ltd provides power grid, microwave tubes, related consumables, power conversion and RF, engineered solutions, high-value flat panel detector solutions, and service training for diagnostic imaging and customized display solutions. 

For the third quarter ended February 26, 2022, its net sales were US$55.3 million, 22.3% up YoY from US$45.23 million in the previous year’s quarter.

The net income came in at US$2.89 million or US$0.21 per diluted share versus US$0.228 million or US$0.02 per diluted share in the corresponding quarter in 2021.

With a market capitalization of US$199.87 million, the stock has a P/E ratio of 17.17 and the forward P/E ratio of 16.35. Its dividend yield is 1.73%, and its annualized yield is 0.24%. 

The stock traded from US$15.76 to US$7.20 in the last 52 weeks.

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Bottom line:

Despite its biggest market capitalization, inflation and interest rate fears have weighed down the technology sector. As the stock market is volatile, investors should choose the industry or the stocks judiciously before investing in the share market.  


 


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