Stocks To Buy And Watch: Tech Leader Super Micro Computer Hits Latest Buy Point
IBD 50 Stock To Watch Pick from Wednesday super microcomputer (SMCI) is one of the top stocks to buy and watch in the ongoing uptrend in stock markets. SMCI shares rose 0.5% on Wednesday midday, trading just above the last buy point.
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Super Micro is a storage system and server manufacturer specializing in enterprise, cloud, AI and 5G infrastructure. Super Micro strives to be a “Total IT Solutions” provider with green and energy-saving servers, AI, storage and IoT switch systems, software and services.
The company’s most recent quarterly results were released on Jan. 31, and Super Micro’s shares rose more than 10% on better-than-expected second-quarter earnings and sales. The company earned an adjusted $3.26 per share on sales of $1.8 billion, up 270% and 54% year over year.
Super Micro IBD stock reviews
This buy-and-watch tech stock has a perfect Earnings Per Share rating of 99 and an SMR rating of “A” according to IBD Stock Checkup.
Over the past three years, Super Micro has delivered 50% compound annual earnings growth, with triple-digit earnings growth over the past four quarters. Analysts are expecting EPS growth of 83% for the current year. Revenue growth has averaged 26% per year over the past three years. Meanwhile, the company reported a modest 7% pre-tax margin and a solid 25% return on equity in fiscal 2022.
With an elevated IBD Composite Rating of 98 out of 99, backed by strong fundamental and technical metrics, Super Micro is the best-rated stock in the computer hardware industry group, making it one of the top stocks to buy and watch.
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Stocks to buy and watch: SMCI hits buy point
Super Micro shares are attempting to break out of a double bottom above a buy point of 92.90 after strong gains over the past few weeks. Shares are just above the buy point and in the 5% buy zone, peaking at 97.55. SMCI shares were up 0.5% on Wednesday midday.
In the past few weeks, the stock has decisively recaptured its key 50-day moving average, according to IBD MarketSmith. Meanwhile, the relative strength line is approaching new highs, which is a bullish signal if a breakout occurs. The RS line measures a stock’s price performance relative to the S&P 500.
Given its fundamental and technical strength, Super Micro is one of the top stocks to buy and watch in the current market.
Other IBD 50 stocks to buy and watch
These are three recent IBD 50 Stocks To Watch picks.
Source: IBD data as of February 15, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top stocks to buy and watch and the stock market.
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