For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Allegro MicroSystems, Inc. (ALGM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.
Allegro MicroSystems, Inc. is a member of the Computer and Technology sector. This group includes 615 individual stocks and currently holds a Zacks Sector Rank of #2. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Allegro MicroSystems, Inc. is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for ALGM's full-year earnings has moved 14.5% higher within the past quarter. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that ALGM has returned about 57.4% since the start of the calendar year. At the same time, Computer and Technology stocks have gained an average of 14.6%. This means that Allegro MicroSystems, Inc. is outperforming the sector as a whole this year.
One other Computer and Technology stock that has outperformed the sector so far this year is Fortinet (FTNT). The stock is up 105.5% year-to-date.
The consensus estimate for Fortinet's current year EPS has increased 12.9% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Allegro MicroSystems, Inc. belongs to the Electronics - Semiconductors industry, a group that includes 50 individual companies and currently sits at #41 in the Zacks Industry Rank. On average, stocks in this group have gained 25.5% this year, meaning that ALGM is performing better in terms of year-to-date returns.
In contrast, Fortinet falls under the Security industry. Currently, this industry has 9 stocks and is ranked #83. Since the beginning of the year, the industry has moved +70.7%.
Allegro MicroSystems, Inc. and Fortinet could continue their solid performance, so investors interested in Computer and Technology stocks should continue to pay close attention to these stocks.
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