The Nasdaq Composite Index is one of the three most widely followed stock market indexes. While the index is heavily concentrated in technology companies, it includes other new and trendy businesses…
So far this year, the index has outperformed the S&P 500, gaining more than 42%. This excellent performance can be attributed primarily to the increased dependence by individuals and businesses on technology solutions. But some of the index’s non-tech members have also proved their business strength this year.
Because the U.S. Congress has now approved a long-awaited $900 billion COVID-19 rescue package, investors are optimistic about the performance of the index going into 2021.
So, it is wise to bet on Baidu, Inc. (BIDU – Get Rating), Align Technology, Inc. (ALGN – Get Rating), Synopsys, Inc. (SNPS – Get Rating), and Take-Two Interactive Software, Inc. (TTWO – Get Rating). They are strategically positioned to gain in the upcoming months and drive the index higher we think.
Baidu, Inc. (BIDU – Get Rating)
Based in Beijing, China, BIDU is a Chinese language internet search provider. China has the world’s largest internet user population, and the company is strategically placed to gain in the near term.
BIDU operates through two segments — Baidu Core which includes search services and transaction services, and iQIYI, which is an online video platform with a content library that includes licensed movies, television series, cartoons, variety shows and other programs.
The company’s top line has increased 8.4% sequentially to $4.2 billion for the third quarter ended September 30, 2020. In the iQIYI segment, its subscribers hit104.8 million in the third quarter, and membership revenue increased 7% year-over-year. Non-GAAP net income increased 59.3% year-over-year to $1 billion. And non-GAAP earnings per ADS increased 61.4% year-over-year to $3.
Analysts expect BIDU’s revenue to increase 23.9% for the quarter ending March 31, 2021, 6.7% this year, and 15.1% next year. The company’s EPS is expected to increase 25.9% this year, 12.1% next year, and at a rate of 1.4% per annum over the next five years. BIDU has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters.
On December 8, BIDU announced that its board of directors had authorized a change to the company’s 2020 Share Repurchase Program, which is effective through December 31, 2022. It increased the aggregate value of shares that may be repurchased from $3 billion to$4.5 billion. Also, BIDU entered into definitive agreements with JOYY Inc. (YY) in November. The stock has gained 51.5% over the past year to close yesterday’s trading session at $193.08.
How does BIDU stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #1 of 115 stocks in the China group.
Align Technology, Inc. (ALGN – Get Rating)
Founded in 1997, ALGN is a global medical device company. The company designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners, and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics, and dental records storage. It operates through two segments — Clear Aligner, and Scanner and Services (Scanner) segment.
ALGN’s revenues have increased 20.9% year-over-year to $734.1 million for the third quarter ended September 30, 2020. Clear Aligner cases for teenage patients increased 25.6% year-over-year to 162.7 thousand cases. Imaging Systems and CAD/CAM Services revenues climbed 24.5% year-over-year to $113.4 million. Net income increased 35.9% year-over-year to $139.4 million, and non-GAAP EPS increased more than 52% year-over-year to $2.25.
Analysts expect ALGN’s revenue to increase 33.8% for the quarter ending March 31, 2021, and 34.4% next year. The company’s EPS is expected to increase 141.1% for the quarter ending March 31, 2021, 76.5% next year, and at a rate of 18.9% per annum over the next five years. The stock has gained 103.4% in the past six months. It is currently trading just 0.8% below its 52-week high of $535.
On October 21, ALGN announced the introduction of…
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