While the economy is slowing, many trends in place will continue, even at a slower pace. Companies that can cater to the needs of growing industries can still grow and eventually even buck a market downtrend.
Companies that help grow out some of today’s top tech trends, like electric vehicles or the 5G network, will be most successful if they’re already the industry leaders today. As long as that advantage can be maintained, they’ll likely continue to keep their market share.
One such company that’s been a poor performer is Qualcomm (QCOM). The manufacturer of wireless chips is the perfect play for the 5G rollout, as well as for the ongoing upgrading of smartphones by consumers. That may be why the company is getting an analyst upgrade right now, even in a bear market for stocks overall.
Shares are now flat over the past year, after unwinding gains of about 25 percent in the past year. But earnings are up 66 percent, and revenue is up 40 percent. And with a 28 percent profit margin, the hardware company is continuing to lead the 5G rollout.
Action to take: Investors may like shares near today’s levels, as the stock is inexpensive at 11 times earnings. Plus, shares yield about 2.2 percent right now, with a history of dividend growth over time.
For traders, the October $150 calls, last going for about $5.60, could deliver mid-double-digit growth. But traders should look for the current downtrend in shares to end first.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.