As the US economy witnesses a steady recovery despite rising geopolitical tensions and deepening supply chain disruptions, industrial production is regaining momentum. This should drive the demand for industrial electronics. Therefore, we thought it would be wise to add Arrow Electronics (ARW) and Avnet (AVT) industrial electronics stocks under the radar to one’s watchlist. Let’s discuss.
shutterstock.com – StockNews
The US economy continues to recover despite geopolitical tensions posed by Russia’s invasion of Ukraine and deepening supply chain disruptions. The resumption of industrial activity is driving the demand for industrial electronics. In January, industrial production jumped 1.4%, exceeds the estimate 0.5%. Capacity utilization also experienced the highest increase after March 2019, up 77.6%.
Industrial electronics are known to play an important role in increasing the efficiency and productivity of various industries. It deals with power electronic switches, actuators, IEDs, meters, sensors, automation equipment, etc. As industrial production increases, the industrial electronics industry benefits. According to Precedence Research, the power electronics market is expected to growing at a CAGR of 5.2% to $37.30 billion by 2030.
Against this backdrop, we thought it might be wise to add industrial electronics stock under the radar of Arrow Electronics, Inc. (ARW) and Avnet, Inc. (AVT) to your watchlist.
Click here to view our Industry Sector Report for 2022
Arrow Electronics, Inc. (ARW)
ARW provides products, services, and solutions for industrial and commercial users of electronic components and enterprise computing solutions. That Centennial, Colo based the company operates through its Global Components business and its Global Enterprise Computing Solutions (ECS) business.
On February 10, 2022, ARW announced that it had signed an agreement with Quuppa, a Finland-based Real-Time Location System specialist, whose Smart Location System tracks tags and devices within centimeters and with millisecond latency. ARW’s VP of product management and supplier marketing, Matthias Hutter, said, “Location services are being adopted in many markets, and the addition of Quuppa’s portfolio gives our customers more choice and flexibility in their product designs.”
ARW’s net sales increased 6.6% year-on-year to $9.01 billion for the fourth quarter, ending December 31, 2021. The company’s non-GAAP net income increased 55.9% year-on-year to $379 million. Also, non-GAAP EPS came in at $5.37, representing a 69.4% year-over-year increase.
Analysts expect ARW EPS for the quarter ended March 31, 2022, to increase 60.2% year over year to $4.55. Its revenue for fiscal year 2022 is expected to increase 4.9% year over year to $36.17 billion. And it topped EPS Street’s forecasts in each of the last four quarters. Over the past year, the share price has gained 11.6% to close the last trading session at $113.88.
ARW’s strong fundamentals are reflected in POWRA Rating. It has an overall A rating, which is equivalent to Strong Buys in our proprietary rating system. The POWR rating is calculated taking into account 118 different factors, with each factor being weighted to an optimal level.
It has a B for Growth and Value. This is the first rank of 47 stocks in Technology – Electronics industry. Click here to view ARW ratings for Momentum, Stability, Sentiment and Quality.
Avnet, Inc. (AVT)
AVT in Phoenix, Arizona, is a technology solutions company that markets, sells and distributes manufacturer’s electronic components, including semiconductors, interconnects, passive and electromechanical parts, and other embedded and integrated components. The company’s main operating groups include Electronic Components (EC) and Farnell.
On February 22, 2022, AVT agreed with the Device Authority to accelerate and scale IoT deployments worldwide. Under the agreement, AVT will integrate Device Authority’s KeyScaler platform into its cloud-based device management platform, IoTConnect. AVT VP of IoT Lou Lutostanski said, “By integrating device identity lifecycle management into Avnet’s IoTConnect solution, we enable users to manage devices built on different technologies and platforms through a single pane of glass.”
For its fiscal second quarter, ending January 1, 2022, AVT sales increased 25.6% year-on-year to $5.86 billion. The company’s adjusted operating income increased 170.7% year over year to $215.46 million. And adjusted EPS came in at $1.51, representing a 214.6% year-over-year increase.
For fiscal year 2022, EPS and AVT revenue are expected to increase by 110.7% and 17.1%, year-over-year, to $5.71 and $22.87 billion, respectively. It topped consensus EPS estimates in each of the last four quarters. Over the past three months, the share price has fallen 1.1% to close the last trading session at $38.54.
AVT’s POWR rating reflects this promising outlook. The stock has an overall B rating, which is equivalent to Buy in our proprietary rating system.
It has a B for Growth and Value. It is ranked #10 in Technology – Electronics industry. To see more AVT ratings for Momentum, Stability, Sentiment and Quality, Click here.
Note that AVT is one of the few handpicked stocks currently in the Reitmeister Total Return portfolio. Learn more here.
Click here to view our Industry Sector Report for 2022
ARW shares were unchanged in premarket trading Wednesday. This year, the ARW has fallen -15.19%, compared to the -12.36% gain in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in elementary school, Dipanjan has been interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
Again…
Posts 2 Industrial Electronics Stocks Under the Radar to Add to Your Watchlist: Arrow and Avnet first appeared in StockNews.com
[bg_collapse view=”link” color=”#4a4949″ icon=”arrow” expand_text=”Show More” collapse_text=”Show Less” ]
enterpreneur.com
medium.com
shofipy.com
[/bg_collapse]