Smartphone stocks to consider
The global smartphone market has grown at a fast pace in a short span of time. Tremendous growth potential remains for the companies in the fast-growing emerging markets. Stocks of smartphone manufacturers have become increasingly popular among high growth investors.
Year to date, the First Trust NASDAQ Smartphone Index Fund (FONE) has climbed 19.4%, outpacing the SPDR S&P 500 (SPY) that has gained 8.1%. The First Trust NASDAQ Smartphone Index Fund invests in a basket equal-weighted stocks classified as smartphone companies by the Consumer Electronics Association. This fund is heavily weighted towards US stocks forming 39% of its holdings. Its top holdings include Blackberry (BBRY), LG Electronics (066570.KS), Nokia (NOK), Samsung Electronics(005930.KS), Sony (SNE), and Apple(AAPL).
Year to date, shares of leading smartphone manufacturers Apple, Samsung, Blackberry, LG, Nokia, and Sony have gained 32%, 23%, 54%, 62%, 31% and 23% respectively.
Stocks in the technology sector trade at an average price to earnings ratio of 13.2x. LG and Samsung are currently trading at inexpensive valuations compared to their peers. They have one-year forward price to earnings multiples of 9.3x and 7.7x respectively.
Meanwhile, Apple, Sony, and Nokia are currently expensive. They have one year forward PE multiples of 14.8x, 16.2x, and 18.2x respectively.
Analysts are most bullish on big names like Samsung, Sony and Apple as these stocks have received the highest buy ratings, and few sell ratings. Analysts are most bearish on Nokia and Blackberry as these stocks have received the highest number of sell ratings. Nokia has received just 6 buy ratings, and 10 sell ratings while Blackberry has received 4 buy ratings, 3 sell ratings, and 12 hold ratings.