However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
There are 257 stocks listed under "electronics" in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the ones below:
52-Week Price Change
5-Year Growth Rate
Source: Motley Fool CAPS; Yahoo! Finance.
The markets may be feeling better about the economy after a few reports have offset much of the drumbeat of negativism we've seen, but with the S&P 500 up over 23% over last year, CAPS electronics stocks have done even better. The average stock is up 49% from the year-ago period.
Helping the sector's performance was OLED microdisplay maker eMagin, which rose nearly 400% in value in the past year, and digital media chip maker MIPS Technologies
Of course, on the other end, are Evergreen Solar and FormFactor, which fell 70% and 43%, respectively, over the past 12 months. So let's take a closer look at why investors think some of these other companies won't be jumping from the frying pan into the fire now that the markets are roiled again.
Some spring in its step
Despite holding lots of promise, Sigma Designs, a chip maker for TVs and set-top boxes, continues to disappoint. It's not that it's not growing, it's just not growing fast enough for some. Yet this seems to be just a situation delayed, not one that's never going to come. MIPS, for example, is combining technologies from Sigma, Adobe
While those kinds of developments will prove fruitful when consumers do return, one of the Fool's tech experts, Anders Bylund, wonders why Sigma plays a defensive game of protecting its traditional business lines and doesn't branch out into other arenas. CAPS All-Star Chemdawg might agree about falling short on its potential, though this player still believes Sigma offers an attractive valuation:
I still like the valuation and it posted almost a buck a share in cashflow in 2010. priced at roughly 110% of book value....No Debt
MIPS, after all, is grabbing the tablet computing opportunity with models containing their technology shipping to Best Buy and other electronics retailers.
Tablets and smartphones will be the next big areas chip makers will be tackling for their advanced, next-generation processors. These things gorge themselves on graphics now, and that will only grow more true in the future. Texas Instruments is introducing an upgraded version of its OMAP processor that will support 3-D graphics later this year, to fend off the inroads NVIDIA and Qualcomm
Yet NVIDIA is still the leader here, with design wins from the leading challengers to the iPad hegemony, including Motorola Mobility, HTC, and Acer.
CAPS member mienyn is looking for NVIDIA's Tegra 2 chip to provide a graphic lesson in growth, though bluedome would like to see more "walk" and less "talk" from the chip leader. "too much hype about its plans, when it hasn't executed any of them and it's existing business isn't that great."
Texas Instruments is a well managed company which has fully integrated itself into our everyday lives. They operate in over 30 countries and are heavily relied upon by large equipment manufacturers, design manufacturers, contract manufacturers, and distributors. Most people know them for their calculators... but that's just a small part of what they do. They manufacture products which are in televisions, wireless devices, automobiles, smartphones, computers, and more.
The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.
Best Buy is a Motley Fool Inside Value selection. Adobe Systems, Best Buy, and NVIDIA are Motley Fool Stock Advisor recommendations. FormFactor is a Motley Fool Hidden Gems choice. Motley Fool Options has recommended a diagonal call position on Adobe Systems. Motley Fool Options has recommended a bull call spread position on FormFactor. The Fool owns shares of Best Buy, FormFactor, Qualcomm, and Texas Instruments. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Rich Duprey owns shares of Motorola Mobility but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.