4 Top Growth Stocks to Buy Today

Although market volatility led investors to rotate away from growth stocks to value stocks earlier this year, growth stocks have been gaining significant attention lately due to the continued economic recovery. Investors’ interest in growth stocks is evident from the SPDR S&P 500 Growth ETF’s (SPYG) 15.3% return over the past six months. This compares to the SPDR S&P 500 Value ETF’s (SPYV) 3.7% return over this period.

The Fed’s continued support to the economy by keeping the benchmark interest rates unchanged, the expected support from the proposed infrastructure spending, and solid third-quarter corporate earnings projections, should bode well for growth stocks.

Therefore, it could be wise to bet on Amkor Technology, Inc. (AMKR), Diodes Incorporated (DIOD), Extreme Networks, Inc. (EXTR), and Computer Programs and Systems, Inc. (CPSI), which possess solid growth attributes.

Amkor Technology, Inc. (AMKR)

AMKR provides outsourced semiconductor packaging and test services worldwide. The company offers deep submicron wafer fabrication, wafer probe testing, integrated circuit packaging assembly and design, final testing, reliability testing, burn-in, and electrical characterization. It serves integrated device manufacturers, fabless semiconductor companies, OEMs, and contract foundries.

On August 10, 2021, AMKR announced that it is advancing the evolution of 5G RF module design, characterization, and packaging technology. AMKR’s double-sided, molded ball grid array (DSMBGA) platform and other advanced System in Package (SiP) technologies should enable it to capitalize on the rising demand for packages that support 5G.

On February 23, AMKR unveiled new measures to help the company achieve Industry 4.0 initiatives, enabling factory automation. By leveraging artificial intelligence, machine learning, and interconnected systems, Industry 4 aims to improve product and service quality, decision-making speed on the factory floor, and utilization of high-value assets. AMKR is looking forward to reducing cycle times for advanced packaging processing with these tools.

For its fiscal second quarter that ended June 30, 2021, AMKR’s net sales came in at $1.41 billion, representing a 19.9% year-over-year rise. The company’s gross profit increased 41.9% year-over-year to $272.82 million. Its operating income came in at $155.12 million, up 79.3% from the prior-year period. While its net income increased 127% year-over-year to $125.81 million, its EPS increased 121.7% year-over-year to $0.51. As of June 30, 2021, the company had $724.79 million in cash and cash equivalents.

Over the past three years, the stock’s EBITDA and total assets have grown at CAGRs of 8.9% and 8.3%, respectively. AMKR’s EPS is estimated to rise 71.4% year-over-year to $2.40 in the current year. It surpassed Street EPS estimates in each of the trailing four quarters. Analysts expect its revenue to be $6.14 billion for the current year, representing a 21.5% year-over-year improvement. The stock’s EPS is expected to grow at a rate of 25.4% per annum over the next five years. The stock has gained 147.9% over the past year and 14.5% over the past three months. It ended yesterday’s trading session at $25.78.

AMKR’s POWR Ratings reflect this promising outlook. The stock has an overall grade of A, which equates to a Strong Buy rating in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has an A grade for Value and Momentum, and a B grade for Growth. Click here to see additional grades for AMKR’s Stability, Sentiment, and Quality.

Of the 97 stocks in the B-rated Semiconductor & Wireless Chip industry, AMKR is ranked #9.

Click here to check out our Semiconductor Industry Report for 2021

Diodes Incorporated (DIOD)

DIOD manufactures and supplies discrete, logic, and analog and mixed-signal semiconductor devices to the consumer electronics, computing, communications, industrial, and automotive markets. It sells its products through direct sales and marketing personnel, independent sales representatives, and distributors.

On August 10, 2021, DIOD introduced the PAM8907 piezoelectric sounder driver for maximizing sound pressure level (SPL) delivery from a ceramic/piezo sounder. With a built-in synchronous boost converter and operating across an ambient temperature range, the PAM8907 extends SPL in battery-powered systems optimized for use in wireless trackers, industrial alarm systems, medical equipment, domestic appliances, and longer runtimes.

DIOD reinforced its extensive linear ReDriver IC portfolio by introducing two new 3.3V-rated multi-lane active demux devices on July 29. These advanced ReDrivers address the demux needs set by the intense functions of mobile workstations, gaming PCs, and display dongles. Able to provide ultra-low latency operations with lower supply voltages, DIOD expects to gain expanded market reach across the industry.

DIOD’s net sales for its fiscal second quarter that ended June 30, 2021, increased 52.6% year-over-year to $440.45 million. The company’s gross profit came in at $159.80 million, up 57.5% from the prior-year period. Its income from operations has been reported at $65.36 million for the quarter, representing a 111.7% year-over-year improvement. While its non-GAAP net income increased 90.8% year-over-year to $54.63 million, its non-GAAP EPS increased 122.2% year-over-year to $1.20. The company had $292.65 million in cash and cash equivalents as of June 30, 2021.

The stock’s EBITDA and total assets have grown at CAGRs of 11.8% and 11.5%, respectively, over the past three years. Analysts expect DIOD’s EPS to improve 103.4% year-over-year in the current year to $4.93. The consensus revenue estimate of $1.78 billion for the current year represents a 44.6% rise year-over-year. It surpassed the consensus EPS estimates in each of the trailing four quarters. Analysts expect the stock’s EPS to grow at a 15% rate per annum over the next five years. The stock has gained 87.8% over the past year and 22.8% over the past three months. It closed yesterday’s trading session at $92.72.

DIOD’s POWR Ratings reflect this promising outlook. The stock has an overall grade of A, which equates to a Strong Buy rating in our proprietary ratings system.

The stock has a B grade for Growth, Value, Momentum, and Sentiment. Click here to see additional grades for DIOD (Stability and Quality).

DIOD is ranked #5 out of 97 stocks in the Semiconductor & Wireless Chip industry.

Extreme Networks, Inc. (EXTR)

EXTR provides wired and wireless network infrastructure equipment, software, and services for enterprises, data centers, and service providers. The company markets its products to business, governmental, healthcare, service provider, and educational customers, focusing on corporate enterprises and metropolitan service providers worldwide.

In an announcement dated September 22, 2021, EXTR deployed an advanced, cloud-based network to connect all supermarket retail stores, warehouses, and corporate offices for the Colruyt Group, a Belgian retail corporation. The implementation enables Colruyt to detect network anomalies, optimize its business operations, manage its entire network through a single dashboard and create a reliable mobile experience. EXTR is looking forward to a long-term partnership with Colruyt Group.

On September 15, 2021, EXTR acquired Ipanema, the cloud-native enterprise SD-WAN division of Infovista S.A. The acquisition expands EXTR’s market-leading ExtremeCloud portfolio, offering new cloud-managed SD-WAN and security software solutions required to power its Infinite Enterprise vision.

For its fiscal fourth quarter that ended June 30, 2021, EXTR’s revenues increased 29% year-over-year to $278.09 million. The company’s non-GAAP gross profit came in at $168.31 million, representing a 31.5% year-over-year improvement. Its non-GAAP operating income came in at $37.37 million, indicating a 233.8% rise from the prior-year period. EXTR’s non-GAAP net income came in at $24.61 million, representing a 635.1% rise from the year-ago period. Its non-GAAP EPS increased 533.3% year-over-year to $0.19. As of June 30, 2021, the company had $246.89 million in cash and cash equivalents.

The stock’s EBITDA and total assets have grown at CAGRs of 9% and 9.5%, respectively, over the past three years. Analysts expect the stock’s EPS to improve 31.6% year-over-year to $0.75 in the current year. The consensus revenue estimate of $1.08 billion for the current year indicates a 7.4% rise from the prior-year period. EXTR surpassed the consensus EPS estimates in three of the trailing four quarters. And its EPS is expected to grow at a 20% rate per annum over the next five years. EXTR has gained 159% over the past year and declined 10.9% over the past three months. It closed yesterday’s trading session at $9.89.

It’s no surprise that EXTR has an overall grade of A, which equates to a Strong Buy rating in our POWR Ratings system. The stock has an A grade for Growth and Value, and a B grade for Quality. Click here to see additional grades for EXTR, including Stability, Sentiment, and Momentum.

Of the 55 stocks in the B-rated Technology - Communication/Networking industry, EXTR is ranked #2.

Computer Programs and Systems, Inc. (CPSI)

CPSI provides healthcare information technology solutions and services. The company offers an electronic health record system and patient care services. It serves community hospitals, physician clinics, skilled nursing and assisted living facilities, and small specialty hospitals.

In an announcement dated September 21, 2021, Get Real Health, a member of the CPSI family of companies and a provider of comprehensive patient engagement tools, expanded its international presence through implementation in Achterhoek, Netherlands, together with local partners MIJNPGO and WeDoTrust. This partnership will support improved healthcare delivery and patient care outcomes in that region.

On July 26, 2021, CPSI announced its integration of healthcare software company Medicomp Systems’s Quippe Clinical Data Engine across its electronic health record (EHR) platforms. By delivering clinically relevant data directly within clinical workflows, this new licensing partnership will provide clients with more efficient access to patient- and problem-specific information at the point of care.

For the fiscal second quarter that ended June 30, 2021, CPSI’s total sales revenues increased 15.1% year-over-year to $68.53 million. The company’s gross profit came in at $33.89 million, up 12.6% from the prior-year period. Its adjusted operating income came in at $7.74 million, representing a 181.9% year-over-year improvement. CPSI’s non-GAAP net income came in at $10.81 million, indicating a 98.3% rise from the prior-year period. Its non-GAAP EPS increased 92.3% year-over-year to $0.75. As of June 30, 2021, the company had $19.13 million in cash and cash equivalents.

CPSI’s EBITDA and total assets have grown at CAGRs of 3.5% and 6.8%, respectively, over the past three years. The consensus EPS estimate of $2.70 for the current year represents a 22.2% year-over-year improvement. CPSI’s revenue is estimated to rise 5.6% year-over-year to $279.18 million in the current year. It surpassed Street EPS estimates in three of the trailing four quarters. CPSI’s EPS is expected to grow at an 18% rate per annum over the next five years. The stock has gained 28.7% over the past year and 7.6% over the past three months. It ended yesterday’s trading session at $35.52.

CPSI’s POWR Ratings reflect this promising outlook. The stock has an overall grade of A, which equates to a Strong Buy rating in our proprietary ratings system.

The stock has a B grade for Growth, Value, Stability, and Sentiment. Click here to see additional grades for CPSI, including Quality and Momentum.

CPSI is ranked #2 out of 85 stocks in the Medical - Services industry.

Click here to checkout our Healthcare Sector Report for 2021

AMKR shares were trading at $24.96 per share on Wednesday afternoon, down $0.82 (-3.18%). Year-to-date, AMKR has gained 66.34%, versus a 17.45% rise in the benchmark S&P 500 index during the same period.

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.

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