The market drops 4% one day. The next day it rallies 4%. Then it sells off again. And then back up.
Good news can be bad news — and vice versa.
It’s all a bit confusing right now. And on top of it all, it’s hard to pull out what is related to the coronavirus from China and what is just stocks finally going through a correction. Or both.
But instead of trying to figure out heads and tails in all this, just stick to good stocks that may sell off a bit. Those lowered prices will help during their inevitable rise.
And the tech sector is one of the best places to look for these triumphs.
Whether it’s 5G, the Space Race or new equipment, there are some trends that will continue in good and bad times.
These seven tech stocks to buy on coronavirus dips are the perfect examples.
Tech Stocks to Buy: Esco Technologies (ESE)
Esco Technologies (NYSE:ESE) is one of those companies that has built a a formidable business that few people outside the industries it works in would know about.
It manufactures and sells highly engineered products for the aerospace, defense and utility sectors. These are industries that have very specific needs and demand high quality, reliable equipment at every phase of their operations.
When you become a key supplier over three decades, you have become part of an elite club. And that’s very good for shareholders because these aren’t the types of products that you look to save money on through a cheaper supplier. Equipment failure can be catastrophic and very expensive.
Buying from a company with a long record of dependability is worth paying a premium price.
And regardless of U.S. productivity in the short term, these industries are here for the long haul, and expanding.
ESE stock is up 29% in the past 12 months and will be a steady grower for years to come.
Itron (ITRI)
Itron (NASDAQ:ITRI) is another business that specializes in working with companies that are crucial to the U.S. infrastructure.
In Itron’s case, it offers smart networks, software, meters and sensors to electric and water utilities to help them better manage their resources. It has been helping companies and cities around the world since 1977.
One of the best examples of what it does is its work in Paris, France. The City of Lights had a goal to cut its energy use by 30% over 10 years. It chose ITRI to help by looking at its complex system to see if it could find efficiencies and smart solutions to manage its 200,000 street and traffic lights.
It also helps these utilities recover quickly and safely after major power outages or similar catastrophic events.
The stock is up 45% in the past year. And while some of that growth has been a flight to safety, it has a strong track record of reliable growth. That’s what potentially makes a stock a great buy in my Growth Investor strategy.
Aerojet Rocketdyne (AJRD)
Aerojet Rocketdyne (NYSE:AJRD) has been around since 1915. It’s one of the oldest aerospace companies in the U.S.
Granted, it started as the General Tire & Rubber Company in Akron, Ohio. But over the years it was involved in radio, television studios, hotels and even an airline company.
But by 1945, it started working with the U.S. Department of Defense on rockets. And since then, the company has been a leading supplier of aerospace technology to the Pentagon.
Given the new Space Race that is underway, not only among nations but also private aerospace companies, AJRD is seeing a resurgence of interest from all these parties, especially in the U.S.
Remember the U.S. is beginning to ramp up its Space Force, which will continue to grow and demand a great deal from its most reliable contractors.
The stock is up more than 42% in the past year but only trades at a current price-earnings ratio of 30, which means it’s not even trading at a significant premium.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is one of the world’s top chip makers for mobile devices and one of the world’s leading telecom equipment makers.
It is so powerful that it has come up against monopoly issues and licensing fights with governments around the globe in the past five years.
But those days are behind the stock. And demands for 5G upgrades are rising around the world.
While there might be some issues with how countries are dealing with integrating Huawei’s 5G systems into their telecom infrastructure, the fact is, QCOM is system agnostic. Its products work with all the major 5G telecom network infrastructures. And the buildout surrounding that technological breakthrough is a source of extremely compelling stock buys now.
Certainly, there’s an increase in competition these days for QCOM, but it has shown that it can survive competition and adversity with equal aplomb — and expanding earnings.
The stock is up 44% in the past 12 months, sports a mere 22 P/E and delivers a reliable inflation-trouncing 3% dividend.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor Manufacturing (NYSE: TSM) is one of the leading chipmakers in the world. And its location in Taiwan has certainly been a blessing to many U.S. tech firms during the trade war.
But those days aren’t over yet. You see, while TSM is the top chipmaker for Apple (NASDAQ:AAPL), it’s also becoming a major chipmaker for China’s Huawei, the largest telecom in the world.
The U.S. government isn’t happy about Huawei’s growth and expansion, especially in 5G, where the Chinese telecom is closer to market than its U.S. competitors.
The U.S. has threatened to limit the use of U.S. equipment to produce semiconductors for Huawei. Obviously, this would be a big deal for TSM.
However, most people don’t see this happening in an election year since this is a $96 billion industry and there would serious repercussion in the U.S. economy.
The stock is up 38% in the past year and is still a major player in numerous tech trends that will be relevant in the next decade.
KLA (KLAC)
KLA (NASDAQ:KLAC) is all about process control and yield management. Of semiconductors.
It’s one of those companies that is a major player in the chip industry that no one ever hears about, except people in the chip industry or that cover the chip industry.
But the point is, it is a major player, with offices and plants around the world.
As 5G begins to roll out, so will new devices that are capable of processing the signals so they can reap the benefits of 5G’s massive boost in bandwidth. And as these new generations of chips begin to roll out, so will KLAC’s job of making sure they’re built well.
These types of companies can rise and fall with more forward-facing chip companies, but this business is necessary to any tech growth.
KLAC is trading at a P/E of 24 and sharing a nearly 2.2% dividend. And that’s after gaining 34% in the past 12 months.
TransDigm (TDG)
TransDigm (NYSE:TDG) is a producer, designer and supplier of highly engineered aerospace equipment, systems and subsystems for commercial and military customers.
It has a number of brands underneath the umbrella that provide core systems. These systems get and keep most of the aerospace industry’s products in the air.
Given the upgrades and new projects on the military side and the growth in travel around the world, TDG is in very good position for solid long-term growth.
Most of its offices are in the U.S., Europe and Asia — the markets that are the biggest in potential for both traffic and clients.
The stock is up 19% in the past 12 months and is seeing investors moving toward safety piling in.
But, in the big picture, there are companies out there that offer not just safety, but a better world.
Grab Your Slice of the 5G Profits
Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. That’s a big deal for rural areas without broadband. And because 5G is 100 times faster than 4G, it’ll allow your internet devices to work in real time. This advancement is a game changer for tech companies.
Now, as amazing as 5G promises to be, it doesn’t get us anywhere without the right infrastructure in place. You can never stream Netflix (NASDAQ:NFLX) using your smartphone plan (at any speed!) unless there’s a cell tower nearby.
With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity now.
Cable companies can do their best to fight back with fiber optics … but their services aren’t even available in some areas. And anyway, they can’t compete with the convenience of a smartphone, once it’s got ultra-fast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.
The stock I’m targeting is enjoying an influx of big money on Wall Street, and it has strong fundamentals, too — making it an A-rated “strong buy” in my Portfolio Grader system.
When you do, you’ll see how to claim a free copy of my new investment report, The Netflix of 5G, which has full details on this company — and what makes it such a great buy now.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In one recent feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.