Some hidden 5G stocks are currently being ignored by investors and could soar in value this year.
These stocks belong to companies directly involved in the development and deployment of 5G technology, or those that stand to benefit greatly from its widespread adoption. This includes large carriers, equipment manufacturers, and small and medium-sized companies specializing in critical components such as semiconductors, antennas, and network solutions.
As a broader index, such as S&P500 And that Nasdaq If they continue to rise, the valuations of these companies will follow suit, making them formidable investments.
Here are three hidden gem 5G stocks that investors should consider.
Jabiru (JBL)
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Jabiru (New York Stock Exchange:JBL) is a manufacturing services company operating in various segments including electronic manufacturing services (EMS) and diversified manufacturing services.
Despite the softening outlook announced by management, I think now is the right time to buy JBL stock. The company expects fiscal 2024 first-quarter sales to be between $8.3 billion and $8.4 billion, slightly below its prior range. Core earnings per share for the quarter is expected to be near the midpoint of the previously provided range. Second quarter revenue forecasts are set between $7 billion and $7.6 billion.
However, there are some positives to this adjustment as well. The company expects adjusted free cash flow to exceed $1 billion for the year and will continue to expand its stock repurchase program.
Analysts also remain bullish on JBL’s outlook, expecting EPS to increase by 18.25% and revenue to increase by 4.21%.
JBL stock is up 66.50% over the past year, and I think its momentum is strong enough despite short-term headwinds.
Ericsson (ERIC)
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Ericsson (NASDAQ:Eric) is a global leader in communications services and equipment, supplying critical infrastructure to the 5G industry.
ERIC stock faces some headwinds as global inflation remains high, but the company is implementing a strategy to cut costs and grow its enterprise and mobile divisions. The company’s third quarter results are in line with this direction, with an EBITA margin of 7.3% and an effort to reduce sensitivity to changes in market composition and volumes.
It should be noted that investing in ERIC is contrarian as ERIC will see a 23% YoY decline in network revenue in Q4 2023.
By some accounts, analysts would expect this to be a negative sign, but I take the opposite view. When a company has excessive costs, even with a modest operating margin of 9.87%, as was the case with ERIC, this can prompt internal change. This may include layoffs that lead to more sophisticated business models, and companies that shed employees often outperform in subsequent quarters.
Although ERIC’s accounting profits are negative, its price-to-sales ratio is only 0.71, indicating that it is significantly undervalued for the efforts it has made to date to increase its profit margins.
Corning (GLW)
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Corning’s (New York Stock Exchange:GLW) The optical communications sector, which manufactures fiber optic cables and related equipment, is critical to the rollout of 5G networks.
I feel that now is a good time to invest in GLW stock if investors want to get the company’s stock at a cheap price. Corning expects first-quarter 2024 core sales to be approximately $3.1 billion and core EPS to be between $0.32 and $0.38. This forecast puts the first quarter potentially at the lowest point of the year.
The company also predicts high revenue growth of approximately 17% year-on-year in 2024.
Like other hidden 5G stocks on this list, GLW appears to be undervalued as it trades at just 2.17 times sales, and Wall Street rates the stock a Buy. .
On the date of publication, Matthew Farley did not have (directly or indirectly) any positions in the securities mentioned in this article. Opinions expressed are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
