Tech stocks recently closed a strong quarter that left the Nasdaq index up 8% so far in 2019. That rally was supported by a brightening earnings outlook across much of the industry, but a few individual companies stand out as particularly attractive investments today.
Below, three Fool.com contributors will look at why…
No recharge needed
Demitri Kalogeropoulos (iRobot): Robotic cleaning device specialist iRobot is set to report its fiscal first-quarter earnings in late April, and there are plenty of reasons to expect good news in that announcement. The company in early February wrapped up a banner fiscal year that saw sales soar through the $1 billion mark from $884 million on strong demand for its latest lineup of Roomba products. Rising selling prices helped gross profit improve at a faster pace — despite intense competition at the value side of the market.
These wins put iRobot in a great position to navigate challenges in fiscal 2019 that should include higher input prices and more competitive threats. And even that cost issue has a silver lining, since it is forcing management to make aggressive changes to its supply chain in order to build a much more efficient business.
In early 2018, CEO Colin Angle told investors that the next three years would likely be pivotal in determining which companies succeed over the long term as the robotic cleaning niche moves into the mainstream. The first of those years has to be considered a win for iRobot, and — assuming it can maintain its innovation lead — it’s aiming for a second triumph in 2019.
Beating Google at its own game
Jamal Carnette, CFA (Yandex): There are only a few countries where Alphabet‘s Google doesn’t claim the title as largest search engine by market share — China and Russia being both notable examples. Russia is interesting because Google’s not banned, but because Russian search engine Yandex boasts superior indexing and search capabilities for Cyrillic-derived languages.
Although Yandex is beating Alphabet in its home market, the company is wisely copying its U.S. competitor and becoming more of a tech-focused holding company. For example, Yandex has partnered with Uber for an on-demand taxi joint venture, has grown its Yandex Cloud service, and boasts one of the largest job-hunting sites with Yandex Jobs. These services are a play to deepen already existing relationships and further monetize its user base. It’s working as analysts expect the company to report 31% top-line growth in 2019.
I’d be remiss if I didn’t mention…
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