Technology 846

Tech stocks continue to perform well, gaining 16.9% this year.

Allied Motion Technologies Inc. (AMOT) | Daily Alert September 9
Allied Motion makes precision and specialty-controlled motion products and solutions, including DC motors, servo drives, motors, gearing, and controllers. These are used in a broad range of industries within the company’s four segments: Vehicle, Medical, Aerospace & Defense, and Industrial.

Revenues since 2011 have grown at a 15.9% average annual rate, while EPS growth is a bit choppier and just 11.0%, held back some by 2020’s slowdown.

That 2020 slowdown appears to be history. In the second quarter ended June 30, 2021, revenues were up 17.2% over the Q2 2020, and EPS jumped 60.0% to $0.32 from the weakened year-ago quarter. Backlog increased 12% over the first quarter of 2021 and 33% quarter-over-quarter to a record $170.4 million. The time to convert the majority of backlog to sales is approximately three to six months.

Analysts who cover Allied Motion on Wall Street are optimistic about its prospects, projecting 30% average EPS growth over the next five years. We have ratcheted that down to a much more conservative 11.0% for revenues and 13.0% for EPS growth.

From a recent price of $33.75, we calculate that the stock could reach $79 and is a buy up to $39. Our downside price is $25, and the current price represents a reward/risk ratio of 5.4:1. The potential total annual return with a small dividend is 18.8%.
Doug Gerlach, Smallcapinformer.com, 1-877-33-ICLUB, September 2021

Asana, Inc. (ASAN) | Daily Alert September 17
ASAN was acting sloppy for a few weeks, but a very bullish Q2 report has caused a fresh rush of buying. The big story of the report wasn’t so much the numbers (though they were excellent—revenue growth accelerated again to 72%) but the fact that, after a long time of being deployed in a department here or here, Asana’s work management platform is now seeing widespread adoption among big enterprises.

On the conference call, the top brass talked about a few specific deployments and said that revenue received from its largest customers (those spending at least $50,000 annually with Asana) rose a whopping 45% from a year ago—meaning these whales are ordering more after (usually smaller) initial test runs, including some that have 25,000 employees using the platform.

The stock has zoomed higher on the news and has actually extended those gains this week despite the wobbles in growth stocks. We’re aiming to average up (fill out our stake by purchasing another half-sized position) but given that ASAN is extended, and the sell-strength environment, we’ll hold off a bit and see if shares can set up a better risk-reward entry point. We will stay on Buy a Half, though again, aiming for dips is advised. BUY A HALF
Michael Cintolo, Cabot Growth Investor, cabotwealth.com, 978-745-5532, September 9, 2021

Matterport, Inc. (MTTR) | Daily Alert September 21
Matterport scored a really nice upside chart breakout on volume that was about five-plus times normal, and if you look at the chart you can see it. This stock is fairly unknown except for in the real estate community.

I think as this story gets out more to the public/people you will see more institutional money come toward this (exciting) idea that really makes sense.

I would buy MTTR up to $20 and won’t chase it past that.

Reminder, this is NOT a blue-chip, this is NOT a bargain, this is brand-spanking NEW technology that is a game changer, and this stock IS RISKY—just know that. If the market took a header, this could drop 40 or 50%—full disclosure.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, September 14, 2021

EverQuote, Inc. (EVER) | Daily Alert September 29
EverQuote is new to the platform space, and insurance is the platform’s principal offering. EverQuote is already the leading online marketplace for insurance shopping.

The service is free to consumers. Revenue is generated from consumer referrals to insurance providers and advertising by the providers. In some instances, EverQuote receives commissions on insurance-policy sales.

In 2018, the year EverQuote become a publicly traded company, it posted $163.3 million in revenue. Here we are, not quite three years later, and it posted $396.2 million in revenue for the trailing 12 months.

Management is projecting revenue to grow another 30% year over year this year. Growth is expected to throttle back in 2022. Still, Wall Street projects 20% annual revenue growth next year. The company should end 2022 with roughly $534 million in annual revenue.

EverQuote is positioning itself to exploit the opportunity increased online spending brings. It acquired health insurance agency Crosspointe last year to raise its profile in healthcare. PolicyFuel LLC was acquired this past month to expand into property and casualty insurance. Look for EverQuote to further expand into life and home insurance.

I see extreme value in EverQuote’s low share price. Today, they are priced at 1.3 times. Even a return to a two price-to-revenue multiple could produce a 50% return over the next few months. That’s not unreasonable. What’s more, Wall Street’s call for a share price above $50 also resides within the realm of reason.

Buy EverQuote shares up to $25.
Ian Wyatt and Stephen Mauzy, Personal Wealth Advisor, wyattresearch.com, September 7, 2021

Onto Innovation Inc. (ONTO) | Daily Alert October 13
Onto Innovation is being upgraded to Best Buy. The company’s systems and software are used for defect inspection and to control the manufacturing of advanced semiconductors. Major customers include Samsung Semiconductor and Taiwan Semiconductor—tech giants seeking ways to shrink chip designs, accelerate product development, and improve performance.

Onto earns solid Quadrix® scores, including an 86 Overall and 93 in Performance. For 2021, the consensus calls for per-share earnings of $3.56 and implies 85% growth—an achievable target based on recent operating momentum and strong industry trends. For 2022, the consensus implies 13% growth to $4.04, putting the forward P/E at a reasonable 19. Onto is a top pick for 12-month gains.
Richard J. Moroney, CFA, Upside, upsidestocks.com, 800-233-5922, October 2021

*Microchip Technology Incorporated (MCHP)
Microchip Technology’s chips power the everyday gadgets and devices you’ll find in every home in the country.

It comes down to a core piece of technology known as the MCU. Short for microcontroller unit, the MCU is a type of semiconductor that is made up of a processor unit, memory modules, communication interfaces, and peripherals.

The lower-end 8-bit MCUs, like the ones offered by Microchip Technology, are a vital component to the household electronic devices we often take for granted. They’re utilized in products like washing machines, robot and drone technology, and even the video game controllers kids use for hours on end.

Over half the company’s revenue derives from a vast array of electronic devices you use every day, from the chips in your garage door opener all the way down to the ones that are found in the power windows of your car.

For the full fiscal year of 2021, the company posted record sales of $5.4 billion and experienced record gross margins of 62.1%, record operating income of $998.1 million, and a net income of $349.4 million.

For its first fiscal quarter for 2022, it showed rock-solid 19.8% year-over-year growth at $1.57 billion.

We rate Microchip Technology a “Buy” under $160. The risk level is “Low.”
Keith Kohl, Technology & Opportunity, angelpub.com, 877-303-4529, October 2021

*Maxar Technologies Inc. (MAXR)
Maxar Technologies Inc. provides space technology solutions for commercial and government customers worldwide, including communication and imaging satellites, space-based and airborne surveillance solutions, and robotic systems.

Wealth Advisory Earnings Grade: B-

I’m shaking up the portfolios and moving Maxar to the “Dividend Growers” section because I think that its divvy is going to start growing again soon.

Maxar continued to drift lower last month despite announcing a $26 million contract from the U.S. National Geospatial-Intelligence Agency, another five-year contract worth $60 million from the NGA, and a contract to build the SXM-10 satellite for SiriusXM. The successful launch of the next satellite is likely to send shares back into orbit.

Maxar Technologies is a “Buy” anywhere under $45. The 12-month target is $105.
Jason Williams, The Wealth Advisory, angelpub.com, 877-303-4529, October 2021

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