The U.S. Federal Reserve is not expected to increase interest rates until its goals of sustained 2% inflation and maximum employment are reached. In such a low-interest rate environment, small-cap technology stocks are expected to thrive thanks to their continued access to cheap capital. Furthermore, as rising Treasury yields on expectations of a fast-paced economic recovery are steepening the yield curve, there should be sufficient liquidity in the market, which bodes well for small-cap stocks…
Small-cap technology stocks are especially susceptible to borrowing rates since they require large amounts of capital to scale their operations. Given the ample liquidity in the market, many small-cap technology stocks are poised to grow significantly amid digital transformation and a growing global demand for technological solutions.
Super Micro Computer, Inc. (SMCI – Get Rating), Knowles Corporation (KN – Get Rating), Progress Software Corporation (PRGS – Get Rating), Methode Electronics, Inc. (MEI – Get Rating), and Plantronics, Inc. (PLT – Get Rating) are prominent players in their respective fields. Leveraging strong financials and the market’s favorable liquidity, these companies are innovating quickly to stay ahead of the game.
Super Micro Computer, Inc. (SMCI – Get Rating)
SMCI, a global leader in enterprise computing, storage, networking solutions, and green computing technology, develops, manufactures, and markets server solutions. The company also delivers motherboards, chassis, and accessories. SMCI has gained 81.6% over the past year to close yesterday’s trading session at $37.94.
SMCI recently announced the availability of the most complete server lineup in the industry that supports AMD EPYC™ 7003 Series Processors. The company’s SuperBlade delivered up to a 36% improvement over the 2nd Gen to 3rd Gen of AMD EPYC CPUs. Earlier this year, SMCI unveiled the industry’s first 64-core workstation.
For the fourth quarter, the company saw an increase in net sales of 8.9% compared to the same period last year. The company’s net income grew 16.6% during the same period.
SMCI is expected to see revenue growth of 6.3% for the quarter ended March 31, 2021 and 0.3% in 2021. The company’s EPS is estimated to grow 39.2% in 2022 and 10% per annum over the next five years.
SMCI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
It has an A grade for Sentiment and Value. In the B-rated Technology – Communications/Networking industry, it is ranked #13 of 54 stocks.
In total, we rate SMCI on eight different levels. Beyond what we’ve stated above we have also given SMCI grades for Growth, Stability, Momentum, and Quality. Get all the SMCI ratings here.
Knowles Corporation (KN – Get Rating)
KN supplies specialty components that have application in the mobile communications, medical technology, military, consumer electronics, and related sectors. The company also provides micro-acoustic solutions. KN’s stock price has increased 12.34% year-to-date and its last closing price was $20.79.
KN’s revenue is expected to grow 22.7% for the quarter ended March 31, 2021 and 12.6% in 2021. The company’s EPS is estimated to grow 98.4% in 2021 and at a rate of 15% per annum over the next five years.
For the quarter ended December 31, the company’s net sales grew 4% percent compared to the same period last year. The company expects its first quarter revenues to increase 23% year-over-year.
KN recently released a…
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