The tech-heavy Nasdaq Composite has gained more than 5% over the past month—outperforming the S&P 500 and the Dow Jones Industrial Average—as the accelerated pace of the global digital transformation continues to favor the technology industry. In fact, the Nasdaq Composite hit a record high on June 23 after Federal Reserve officials sought to calm fears of a sharp tapering of monetary easing.
Fed Chair Jerome Powell’s recent statement that the central bank will not be raising interest rates too quickly based solely just based on the possibility of an increase in inflation has buoyed investors’ optimism about technology stocks’ the growth prospects of technology stocks in the second half this year. With continued digital transformation and support from the low- interest- rate- environment, the tech industry is poised to soar.
Given this backdrop, we believe prominent Nasdaq stocks SS&C Technologies Holdings, Inc. (SSNC), Omnicom Group Inc. (OMC), and Kulicke and Soffa Industries, Inc. (KLIC) will are expected to achieve experience sustainable growth and deliver market-beating returns in the coming months.
SS&C Technologies Holdings, Inc. (SSNC)
SSNC is a software-enabled services provider that serves the financial services and healthcare industries in the United States and internationally. Securities accounting, front-to-back-office operations, performance and risk analytics, regulatory reporting, and healthcare information processes are all part of the company’s IT infrastructure. The company also offers consulting and implementation services as well as product support services to its clients. SNC is based in Windsor, Connecticut.
This month, SSNC announced that RiverNorth Capital Management, LLC and Hurricane Capital Advisors, has selected SS&C’s front-to-back-office system solutions to handle its $5.3 billion portfolio. SSNC will deliver offer fund administration, middle-office solutions, hosting, and cutting-edge order and execution management tools to the company, thereby helping it them to efficiently establish, manage, and expand its their businesses.
During the first quarter, ended March 31, 2021, SSNC’s revenue increased 5.1% year-over-year to $1.23 billion. Its operating income rose 23% from the year-ago value to $269.1 million. The company’s net income increased 76.3% year-over-year to $174.9 million, while its EPS grew 75.7% from the prior-year quarter to $0.65.
A $4.67The consensus EPS estimate of $4.67 for the current year represents an 8.6% increase year-over-year. The consensus revenue estimate of $4.91 billion for the current year represents a 4.9% increase from the same period last year. The stock has gained 33.6% over the past year and 21.6% over the past nine months.
It is no surprise that SSNC has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. The stock also has a B grade for Growth, Value, and Stability. In the Software-Business industry, it is ranked #2 of 59 stocks.
Click here to check out our Software Industry Report for 2021
In addition to the POWR Ratings grades we have just highlighted, you can see the SSNC rating for Momentum, Sentiment, and Quality.
Omnicom Group Inc. (OMC)
Founded in 1944, OMC provides advertising, marketing, and corporate communications services in the United States, Canada and internationally. The New York City company offers customer relationship management, public relations, sales support and healthcare services, as well as data analytics, and database management services to its customers.
This month, OMC agencies were honored for their creative and media excellence at Cannes Lions Live 2021. In the Network of the Festival competition, all three OMC creative networks (BBDO, DDB, and TBWA) were in the top 10. This recognition should help the company stand out in the market and drive growth for its clients.
In April, OMC the company priced announced the pricing of its $800 million of senior notes. It plans to use the public offering’s proceeds to redeem its senior notes due 2022.
OMC’s net revenue increased marginally year-over-year to $3.42 billion in the first quarter, ended March 31, 2021. Its operating profit surged 10.8% year-over-year to $465.4 million. The company’s net income increased 11.5% from its the year-ago value to $287.8 million over this period. OMC’s EPS increased 11.8% year-over-year to $1.33. Its EBITA grew 10% from the year-ago value to $485.3 million, while its operating margin increased to 13.6% versus 12.3% for the first quarter of 2020.
The company’s EPS is expected to grow 48.9% year-over-year in the current quarter ending June 2021 and 18.2% in 2021. Analysts expect OMC’s revenue to increase 8.2% from the year-ago value to $14.26 billion in the current year. OMC’s stock has gained 52% over the past year. Also, the stock has surged 28.7% year-to-date.
OMC’s POWR Ratings reflect this promising outlook. The company has an overall B rating of B, which translates to Buy in our proprietary rating system. OMC also has a B grade for Value, Growth, and Momentum. Within the Advertising industry, it is ranked #2 of 13 stocks. To see additional POWR Ratings for Stability, Quality, and Sentiment for OMC, Click here.
Kulicke and Soffa Industries, Inc. (KLIC)
Headquartered in Singapore, KLIC develops, produces, and distributes capital equipment and consumable tools for the assembly of semiconductor devices, such as integrated circuits (ICs), high- and low-power discrete devices, light-emitting diodes (LEDs), and power modules. Equipment used to construct semiconductor devices is also serviced, maintained, repaired, and upgraded by the company.
In April, KLIC was honored with the Texas Instruments (TI) 2020 Supplier Excellence Award, recognizing its dedication to technology, supply and quality assurance for its clients, as well as environmental and social responsibility. Theis honor should strengthen the company’s position as a worldwide semiconductor market leader.
During the second quarter, ended April 3, 2021, KLIC’s revenue increased 125.7% year-over-year to $340.2 million. Its non-GAAP operating income rose 441% from its the year-ago value to $89.8 million. The company’s non-GAAP net income increased 367.1% year-over-year to $79.4 million, while its EPS grew 384.6% from the prior-year quarter to $1.26.
KLIC is expected to witness revenue growth of 119.2% for the current year. Its EPS is estimated to increase 389.5% from its the year-ago value to $4.65 in the current year. Over the past year, KLIC’s stock has gained 186.8%. Also, it has returned 93.2% year-to-date.
KLIC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating of B, which equates to Buy in our POWR Ratings system. KLIC has an A grade for Growth, and a B grade for Value, Momentum, and Quality. Among the 99 stocks, it is ranked #9, in the B- rated Semiconductor and Wireless Chip industry. To see more of KLIC’s component grades, click here.
Note that KLIC is one of the few stocks handpicked currently in the Reitmeister Total Return portfolio. Learn more here.
Click here to checkout our Semiconductor Industry Report for 2021
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SSNC shares were trading at $73.55 per share on Monday afternoon, down $0.01 (-0.01%). Year-to-date, SSNC has gained 1.56%, versus a 14.81% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...
More Resources for the Stocks in this Article
| Ticker | POWR Rating | Industry Rank | Rank in Industry |
| SSNC | Get Rating | Get Rating | Get Rating |
| OMC | Get Rating | Get Rating | Get Rating |
| KLIC | Get Rating | Get Rating | Get Rating |
