US Investment Report

03/27/2017 2:50 am EST


Stephen Quickel

Editor, US Investment Report

We have added several technology plays to our buy list. All five are expected to grow earnings by 20.3% for the next five years. They trade at an attractive forward PEG ratio of 0.89, and enjoy strong analyst support. Here's a look at 3 of those picks.

Mercury Systems (MRCY) is an established provider of sensor and mission processing systems for defense and intelligence applications. Though richly valued at new highs, earnings are projected to grow by more than 25% a year going forward.

Applied Optoelectronics Inc (AAOI), a small-cap specialty semiconductor innovator, has shot ahead on a flurry of upgraded growth estimates, more than doubling to 52 in 2017 to date. Yet its valuation ratios still look attractive at a 12.7 forward P/E and a 0.69 PEG. For now, it’s best to buy this stock on price dips.

IPG Photonics (IPGP) is a well-positioned leader in the rapidly growing laser systems sector with 5-year earnings growth estimated at 19% after recent analyst upgrades. The forward P/E is 18, the for- ward PEG is 0.96.

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