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. KLA (KLAC) 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? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.
KLA is a member of the Computer and Technology sector. This group includes 604 individual stocks and currently holds a Zacks Sector Rank of #5. 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 emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. KLA is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for KLAC's full-year earnings has moved 3.2% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, KLAC has gained about 13.6% so far this year. Meanwhile, the Computer and Technology sector has returned an average of -4.1% on a year-to-date basis. As we can see, KLA is performing better than its sector in the calendar year.
One other Computer and Technology stock that has outperformed the sector so far this year is ACI Worldwide (ACIW). The stock is up 4.4% year-to-date.
The consensus estimate for ACI Worldwide's current year EPS has increased 5.8% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
To break things down more, KLA belongs to the Electronics - Miscellaneous Products industry, a group that includes 36 individual companies and currently sits at #159 in the Zacks Industry Rank. On average, stocks in this group have gained 3.3% this year, meaning that KLAC is performing better in terms of year-to-date returns.
ACI Worldwide, however, belongs to the Computer - Software industry. Currently, this 32-stock industry is ranked #85. The industry has moved -3.8% so far this year.
Investors interested in the Computer and Technology sector may want to keep a close eye on KLA and ACI Worldwide as they attempt to continue their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).
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