Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

What are we looking for?

The Technology Select Sector SPDR Fund (XLK) is up 7.8 per cent year to date, which is near the bottom of the S&P 500 sector performance rankings. Digging deeper, we find semiconductors, telecommunications equipment and electronic equipment are supporting the sector the most.

Today we use one of our top-performing U.S. technology strategies to help us identify opportunities in the lagging tech sector ahead of the coming reporting quarter.

The screen

We will be using Trading Central’s Strategy Builder to search for companies in the sector that are showing positive revenue growth and upside price momentum ahead of the heavily anticipated earnings season.

Story continues below advertisement

We begin by setting a minimum market capitalization threshold of US$4-billion. We wish to focus on large-cap names in the market because of the greater stability and safety that they offer.

Next, we filter for stocks that have had at least a 20-per-cent return over the past 52 weeks and 5 per cent over the past four weeks to identify stocks that are showing bullish price momentum.

Finally, we want tech stocks that are indicating positive revenue growth of at least 11 per cent in the most recent quarter compared with the year-ago period, and a historical earnings-per-share growth rate over five years of at least 7 per cent, in order to measure how a company has increased its earnings over the longer term.

For informational purposes we have also included expected earnings report date, price-to-earnings ratio, dividend yield (where applicable) and recent stock price.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities.

What we found

Fifteen technology companies made our list with nine of them being in the semiconductor space.

Topping our list is Applied Materials Inc., a leader in materials engineering services for the semiconductor industry. The company has the best one-year and four-week performance on our list at 170.4 per cent and 23.5 per cent, respectively. Looking ahead to the company’s May 20 earnings release, Applied Materials has a five-year historical EPS growth rate of 28.5 per cent and 24-per-cent revenue growth in the prior quarter compared with the same period last year.

Story continues below advertisement

Adobe Inc., a developer of software products, has the highest five-year EPS growth rate on our list, at 54.3 per cent. Look for the company to report second-quarter earnings on June 17.

Qualcomm Inc., a maker of digital wireless communications equipment, has the highest revenue growth in the most recent quarter of 62.2 per cent compared with the same quarter last year. We can expect the company to report second-quarter earnings on April 28 after the market closes.

Trading Central Strategy Builder provides a back-testing capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described had a 22.8-per-cent annualized return, slightly better than 22.7 per cent for the Nasdaq Composite Index. The S&P 500 advanced 14.2 per cent on the same basis.

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

Technology names to watch as earnings season approaches 

RankCompanyTickerMkt. Cap. (US$ Bil.) 1Y Price Perf. (%)4W Price Perf. (%)Rev. Growth. (%)* 5Y EPS Growth Rate (%)Earns. Report DateP/EDiv. Yld. (%)YTD Price Perf. (%)Recent Price (US$)
1Applied MaterialsAMAT-Q128.0170.423.524.028.520-May31.60.761.2138.54
2Amkor TechnologyAMKR-Q6.2173.017.316.344.826-Apr19.20.667.425.14
3Nvida Corp.NVDA-Q351.0111.913.461.144.921-May71.10.18.3573.01
4Teradyne Inc.TER-Q21.9109.921.015.934.621-Apr31.90.39.9132.70
5Texas InstrumentsTXN-Q178.075.314.021.716.227-Apr33.92.117.6193.93
6Marvell TechnologyMRVL-Q34.0103.617.611.222.728-Mayn/a0.55.950.24
7Microsoft Corp.MSFT-Q1,880.051.37.516.731.229-Apr37.70.812.4253.36
8Cadence Design Sys.CDNS-Q39.898.412.426.721.120-Apr65.8n/a4.5144.51
9Maxim IntegratedMXIM-Q25.678.89.714.027.727-Apr37.0n/a7.595.97
10Adobe Inc.ADBE-Q236.055.612.926.354.317-Jun43.6n/a-1.3501.51
11Analog Devices Inc.ADI-Q58.857.28.419.68.320-May30.41.77.9160.17
12Amphenol Corp.APH-N40.369.08.412.810.228-Apr35.50.92.967.50
13Autodesk Inc.ADSK-Q62.879.78.515.622.427-May123.2n/a-6.3293.80
14Qualcomm Inc.QCOM-Q158.090.19.062.27.028-Apr29.61.9-8.5139.46
15Apple Inc.AAPL-Q2,150.092.36.621.47.328-Apr35.20.6-3.6129.45

Source: Trading Central * Revenue growth: most recent quarter vs. same period a year ago

Gary Christie is head of North American research at Trading Central in Ottawa.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies