Investments: Where Is The Money Going?

Right now, investors are looking to tech stocks, with companies like Square, Facebook, Zoom, and Applied Materials being top buys. Tech companies continue to provide for our needs across the board during the current pandemic, and consumer tech giants Netflix and Snap are set to report earnings this week.

But it's not just about tech. Investors are also interested in stocks with recent quarterly and annual earnings growth of at least 25%. For example, Compass Pathways, Tesla, and 1-800-Flowers.com have all seen their stocks go up 67%, 64%, and 19% respectively over the past 12 months.

Other stocks to watch include Goldman Sachs, Granite Construction, Universal Health Services, and Booking.

Tech stocks

The Global Industry Classification Standard (GICS) groups tech stocks into three main categories: software and services, hardware and equipment, and semiconductors.

• Arista Networks (ANET)
• Taiwan Semi (TSM)
• Nvidia (NVDA)
• CrowdStrike (CRWD)
• ServiceNow (NOW)
• Monday.com (MNDY)
• Microsoft (MSFT)
• Alphabet Inc. (GOOGL)
• Meta Platforms Inc. (META)
• Broadcom Inc. (AVGO)
• Tencent Holdings (TCEHY)
• ASML Holding NV (ASML)
• Square Inc. (SQ)
• Zoom Video Communications Inc. (ZM)
• Compass Pathways (CMPS)
• Tesla (TSLA)
• 1-800-Flowers.com (FLWS)

Growth stocks

• Nvidia (NASDAQ:NVDA)
• Netflix (NASDAQ:NFLX)
• Amazon (NASDAQ:AMZN)
• Meta Platforms (NASDAQ:META)
• Salesforce.com (NYSE:CRM)
• Alphabet (NASDAQ:GOOG), (NASDAQ:GOOGL)
• Tesla
• Compass Pathways
• 1-800-Flowers.com
• Square Inc. (NYSE: SQ)
• Facebook Inc. (NASDAQ: FB)
• Zoom Video Communications Inc. (NASDAQ: ZM)
• Applied Materials Inc. (NASDAQ: AMAT)
• Adobe (NASDAQ: ADBE)
• BlackRock (NYSE: BLK)
• Generac (NASDAQ: GNRC)
• PayPal (NASDAQ: PYPL)
• T-Mobile US (NASDAQ: TMUS)
• Visa (NYSE: V)
• Thermo Fisher Scientific (NYSE: TMO)
• Intercontinental Exchange (NYSE: ICE)
• Fiserv (NASDAQ: FISV)
• ServiceNow (NYSE: NOW)
• Catalent (NYSE: CTLT)

Value stocks

Value investing is a long-term, conservative approach to investing. Value investors aim to buy and hold companies whose share prices are currently lower than their intrinsic value. They analyze the fundamentals of a company's performance, such as earnings, revenue, cash flow, and price-to-earnings ratios, to determine whether a stock is undervalued.

Some examples of value stocks include Honda Motor (HMC), which has a strong reputation for quality, particularly in fuel-efficient vehicles, and is currently implementing a cost-cutting plan and working towards an electric vehicle target. As of May 2023, Honda's stock had a P/E ratio of 8.57, notably less than that of its rival Toyota.

Dividend stocks

Dividend payments are determined by a company's board of directors, who must agree on the amount to be paid out. The dividend yield is the dividend per share, expressed as a percentage of a company's share price. For example, if a company's board of directors decides to issue an annual 5% dividend per share, and the company's shares are worth $100, the dividend is $5. If the dividends are issued quarterly, each distribution is $1.25.

When a company announces a dividend payout, investors may rush to buy into it, as they can see how much they'll earn before the ex-dividend date. This can cause the stock price to go up as more people are interested in the stock. However, on the ex-dividend date, when new investors are no longer eligible for the recent dividend payout, current investors might drive down the stock price, but this is usually temporary and may only occur for high-yield dividends.

Small-cap stocks

ACM Research, Inc. (ACMR): ACMR produces cleaning equipment for the semiconductor industry, removing impurities and particles from microchips. It has been one of the fastest-growing small-cap stocks, with a 5-year average EPS growth of 67.8%. The stock is currently trading below its 52-week high, and its forward P/E ratio is attractive compared to its historical values.

Titan Machinery Inc. (TITN): TITN operates construction and agricultural equipment stores with over 100 locations in the US and Europe. It has the highest 5-year average EPS growth (69.5%) on this list, and analysts expect significant yearly growth over the next five years. The stock is well below its 52-week high, and its forward P/E ratio is forecast to be near its lowest reading in the past five years.

Digi International Inc. (DGII): DGII is a technology company specializing in wireless communication and devices, with over 160 patents and 15 global offices. It has seen exceptional growth, with a 5-year average EPS growth of 60.6%. Analysts expect this high growth to continue, with a forecasted EPS growth of 16.9% this year and 16.5% next year. The stock is currently trading below its 52-week high, and its forward P/E ratio indicates a decent value.

The Bancorp, Inc. (TBBK): TBBK is a financial company providing various services such as debit and prepaid card services, institutional banking, and commercial lending. Analysts expect a significant jump in EPS this year (60.4%) and continued growth next year (14.3%). The stock has been trending higher since mid-2022 and is near a fresh 52-week high. Its forward P/E indicates a good value, and it has outperformed the S&P 500 by 19.8 percentage points per year over the last five years.

Hess Midstream LP (HESM): HESM provides oil and gas midstream services such as gathering, processing, storage, terminaling, and export. It offers an attractive dividend yield of 7.5%, and growing earnings may allow this hefty dividend to continue. Analysts expect EPS to grow by 6.5% this year and 17.3% next year. The stock is trading below its 52-week high, and its current P/E is around the value that generally provides a good value.

Other small-cap stocks that are trending include Sterling Infrastructure, Inc. (STRL), First Financial Bancorp (FFBC), NMI Holdings Inc. (NMIH), JetBlue Airways Corporation, Recursion Pharmaceuticals, Inc., First Majestic Silver Corp., Core Scientific, Inc., and Infinera Corporation.

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