Fundamentally, the case for innovative tech stocks to buy is quite straightforward: rational societies seek to advance in knowledge and productivity. Therefore, an incentive exists for government agencies to bolster their nations’ technological ecosystems. In doing so, collective productivity may rise, leading to an increase in overall wealth.
Still, that doesn’t answer the main question: which of the individual innovative tech stocks should investors consider? For that, I’m going to turn to a compelling technical indicator called the J-Hook.
Structured as a four-step sequence featuring an initial rally followed by a suppression of the upside. In the second go-around, the bulls drive the target equity to a new high ground. From there, the stock could continue marching forward or it could enter a consolidation phase before jumping decisively northward. In a way, it’s putting the projectile in the cannon and waiting for the fuse to be lit.
Every idea listed below printed a J-Hook, according to Barchart’s nine-step qualification algorithm. That makes it very compelling that you should keep close tabs on these innovative tech stocks to buy before they go flying.
Daktronics (DAKT)
Falling under the electronic components industry, Daktronics (NASDAQ:DAKT) specializes in display systems, particularly large-screen video displays found in sports arenas. Naturally, the company also focuses on electronic scoreboards. Along with sporting venues, Daktronics main clients include providers of transportation systems and commercial advertising. As society normalizes from the Covid-19 pandemic, the push to attract new customers could lead to big gains for DAKT stock.
Notably, Barchart’s J-Hook screener identified Daktronics as a potential buying opportunity. What may lead to some hesitation is that DAKT has already performed swimmingly well this year. Still, there could be even more room to run. In the past four quarters, Daktronics posted an average earnings per share of 30 cents. This figure beat the collective consensus view of 16 cents.
In the trailing 12 months (TTM), the company posted EPS of 74 cents on sales of $818.08 million. Looking to year’s end, analysts believe that EPS may get wobbly, slipping to $1.06. However, revenue may rise 3.3% to $845.16 million, with the high-side estimate calling for $850.8 million. It’s one of the innovative tech stocks to keep on your radar.
LendingClub (LC)
Technically falling under the credit services industry, LendingClub (NYSE:LC) ranks among a growing number of financial technology (fintech) firms. The company specializes in a peer-to-peer lending platform, which connects borrowers with investors. This business model facilitates personal loans online without having to deal with traditional financial intermediaries. It’s a novel approach to credit services and it may catch on with Generation Z.
Earlier this week, LC stock pinged as one of the J-Hook candidates. It’s not surprising given the recent blistering run. Still, the technical indicator suggests that LendingClub could run even higher. Financially, there could be a case for this optimism. In the past four quarters, the company posted EPS of 9 cents, easily beating the consensus view of 3 cents.
During the TTM period, LendingClub posted EPS of 34 cents on sales of $1.1 billion. By year’s end, analysts are expecting choppy waters, with big drops anticipated in earnings and sales. However, by fiscal 2025, EPS could soar to 72 cents on revenue of $866.67 million. If so, patience could be a virtue, making LC one of the possible tech stocks to buy.
Garmin (GRMN)
A specialist in the scientific and technical instruments industry, Garmin (NYSE:GRMN) is best known for pioneering GPS navigation and wearable tech products. Over the years, the company has expanded its portfolio to include solutions for the automotive, aviation, marine, outdoor and fitness markets. One of its key attributes is its integrated ecosystems, which combine attributes such as GPS, health monitoring and fitness tracking.
Garmin has absolutely been on the move recently, making it one of the tech stocks to buy. As with the other ideas, natural hesitation exists because GRMN has gone up so much this year. Still, if you look at the financials, that alone may assuage some of these concerns. In the past four quarters, Garmin posted an average EPS of $1.50. This handily beat the collective consensus view of $1.28.
During the TTM period, Garmin posted EPS of $7.09 on sales of $5.46 billion. For fiscal 2024, the consensus target happens to be $5.68, above last year’s print of $5.59. On the top line, experts seek $5.86 billion in sales, an increase of 12%. These numbers seem doable given the popularity of wearable tech.
Cognex (CGNX)
Another player in the scientific and technical instruments space, Cognex (NASDAQ:CGNX) provides machine vision products. These systems capture and analyze visual information for the purposes of manufacturing automation task distribution. As you can imagine, the company’s products play a key role in logistics. Further, by utilizing artificial intelligence and deep learning, Cognex ranks as a relevant candidate for compelling tech stocks.
CGNX has been a solid performer this year. However, things really started to heat up several days ago. That might lead to fears of bag holding. However, Barchart’s J-Hook indicator suggests that the ride to the top hasn’t yet finished. On the financial side, the numbers are intriguing. In the past four quarters, Cognex posted an average EPS of 18 cents. This tally beat the collective consensus view of 15 cents.
In the TTM period, Cognex posted EPS of 57 cents on sales of $847.22 million. For fiscal 2024, experts are looking for EPS of 75 cents, a 2.74% bump from last year. On the top line, sales may rise 11.7% to $935.41 million. In the following year, both earnings and sales could see another significant improvement to $1.15 per share on $1.07 billion.
SkyWater Technology (SKYT)
Operating in the semiconductor industry, SkyWater Technology (NASDAQ:SKYT) operates as a pure-play technology foundry. It engages in the provision of semiconductor development, manufacturing and packaging services. With demand for the latest chips increasing across multiple industries, SkyWater could see its sales rise. As well, it can potentially help rectify concerns tied to the global semiconductor supply chain.
Unlike other tech stocks on this list, SkyWater’s market performance this year hasn’t been impressive. Nevertheless, SKYT stock pinged as a J-Hook candidate due to its recent rally. Financially, it’s not unjustified. It’s true that SkyWater isn’t profitable. However, its loss per share in the past four quarters amounted to 7 cents. In contrast, experts anticipated 11 cents in red ink.
During the TTM period, SkyWater posted a net loss of $32.21 million. However, revenue came in at $300.22 million. Also, the latest quarterly growth rate (year-over-year) stood at 20.5%. For fiscal 2024, analysts anticipate that the top line could rise to $334.56 million. If so, that would imply a 16.7% growth rate from last year.
Applied Optoelectronics (AAOI)
Conducting business in the communication equipment industry, Applied Optoelectronics (NASDAQ:AAOI) designs, manufactures and sells fiber-optic networking products mainly in the U.S. It also conducts operations in Taiwan and China. Fundamentally, its mainline solutions are used in data centers and broadband access networks. Given the rise of these sectors, AAOI presents an intriguing idea for tech stocks to buy.
Financially, it must be stated that Applied carries a higher-risk profile. Like SkyWater Technology above, Applied isn’t consistently profitable. In the past four quarters, it produced a loss per share of 13 cents. However, this came under the expert consensus view of 16 cents. Therefore, the “earnings” surprise hit 6.03%.
In the TTM period, the company incurred a net loss of $62.93 million. Revenue reached $205.29 million, though the trend has been declining. Still, analysts expect a recovery trek over the next two years. Sales in 2024 could hit $260.68 million, up 19.8% from 2023’s result of $217.65 million. In 2025, revenue could soar to $437.15 million, up nearly 68%. Therefore, it’s one of the tech stocks to watch.
Robinhood (HOOD)
I’ve been talking about financial technology (fintech) firm Robinhood (NASDAQ:HOOD) lately under different angles. Mainly, the company could present a long-term opportunity. Retail investors are still interested in both the equity and cryptocurrency markets. Robinhood’s gamified trading app resonates with young people. The platform is fun and convenient, allowing for organic wealth creation.
HOOD stock may also be relatively undervalued. Right now, shares trade hands at 1.99X trailing-year sales. It wasn’t that long ago – the fourth quarter of last year – when HOOD averaged a price-to-sales ratio of 2.64X. in other words, the company has ample room to grow into its prior valuation. Combined with the fundamentals, that very well could happen.
Also, it’s worth pointing out that, yes, HOOD stock pinged as a J-Hook candidate. If the implications of this technical pattern hold true, shares may be poised for significant growth. In terms of projections, analysts believe that Robinhood can post EPS of 53 cents by year’s end. Last year, the metric sat at 61 cents below parity.
On the top line, sales could shoot northward to $2.45 billion, up 31.3%. Even though it’s been booming, HOOD appears to be one of the tech stocks to buy now.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
