4 Tech Stocks Under $10 Rated As Strong-Buys

Board, Electronics, Computer, Electrical Engineering

Image Source: Pixabay

Most tech stocks soared to new highs last year due to a COVID-19-led dependency on technology. However, the ongoing economic recovery and fears about rising inflation have been motivating investors to rotate away from expensive tech stocks and instead into quality cyclical stocks. This is evident in the Technology Select Sector SPDR Fund’s (XLK) 5.5% gains over the past three months versus the SPDR S&P 500 ETF Trust’s (SPY) 10.2% returns.

This has created an impressive opportunity to buy fundamentally sound tech stocks at reasonable prices. Continued digital transformation and increasing use of cloud computing, artificial intelligence (AI), 5G technology, and other innovations could drive a rebound in the technology sector in the near to mid-term.

Given this backdrop, we think it is wise to bet now on United Microelectronics Corporation (UMC), AU Optronics Corp. (AUOTY), Seiko Epson Corporation (SEKEY), and Richardson Electronics, Ltd. (RELL). They are all currently trading at less than $10, but they hold considerable upside potential.

United Microelectronics Corporation (UMC)

Headquartered in Hsinchu City, Taiwan, UMC is a semiconductor wafer foundry that operates internationally. The company operates through two segments— Wafer Fabrication and New Business. It provides circuit design, mask tooling, wafer fabrication and assembly, and testing services, and is also engaged in the manufacturing of products in the solar energy and LED industries.

On April 28, UMC announced plans to expand capacity at its 300mm Fab 12A Phase 6 (P6) in Taiwan’s Tainan Science Park through a collaboration with several of its leading global customers. Stan Hung, chairman of UMC said, “UMC’s expansion plans follow a return-based strategy that focuses on business growth while maintaining sustainable profitability.”

The company’s operating revenue increased 11.4% year-over-year to NT$47.10 billion ($1.69 billion) for the first quarter, ended March 31. Its operating income grew 123.2% year-over-year to NT$7.62 billion ($274.06 million). Its net income increased 372.5% year-over-year to NT$10.43 billion ($374.95 million).

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