2 Underloved Electronics Stocks With Room to Run

As a group, electronics stocks have managed big gains over the past year

by Josh Selway

Published on May 31, 2017 at 2:11 PM
Updated on Jun 24, 2020 at 10:16 AM

Schaeffer's Senior Quantitative Analyst Rocky White analyzes all the sectors we cover each week, with the goal of identifying the best stocks for our contrarian trading philosophy. For example, last week we took a hard look at industrial stocks, which were surrounded by pessimism, even as they continued to outperform on the charts. One sector that stands out this week is "Electronics," which features names such as Sony, GoPro, and Rockwell Automation. However, it was Cognex Corporation (NASDAQ:CGNX) and Amphenol Corporation (NYSE:APH) that caught our eye as two potentially prime trading opportunities.

Electronics Stocks Underloved By Analysts

But first, the 19 stocks that fall under the "Electronics" umbrella boast an average 52-week gain of 31.3%, with 79% of them trading above their 80-day moving average. Despite this outperformance, the number of "buy" ratings among analysts hasn't moved over the past year. This suggests Wall Street has yet to fully appreciate the strength from this group, and CGNX and APH are two stocks that seem overdue for bullish attention. 

CGNX Stock Trades Above Average 12-Month Price Target

Cognex, which makes technology for automated manufacturing processes, has seen its stock explode over the past year. In fact, CGNX stock has more than doubled in value over the past 12 months to trade at $90.78, with the shares touching a record high of $94.23 on May 25. 

Analysts haven't really taken notice, though. Eleven brokerage firms cover CGNX, and just three recommend buying the stock. Plus, the shares are now trading above their average 12-month price target of $87. As such, upgrades and/or price-target hikes seem like a strong possibility for Cognex.

APH Stock Hits Record High

Amphenol makes electronic and fiber optic connectors for a number of different industries. The stock has been strong over the past year, with several bounces off its rising 80-day moving average helping to send APH to a 27.6% 52-week advance. Earlier today, in fact, APH shares touched a record high of $75.15, and was last seen trading at $74.92. 

Analysts are so far unimpressed. The stock has eight brokerage firms covering it, and only three have issued a "buy" rating. Also, Amphenol stock is within a chip-shot of its consensus 12-month price target of $76.36. It certainly seems like a prime candidate for bullish analyst attention, which could draw more buyers to APH stock's table. 


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