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The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Tencent Holding Ltd. (TCEHY) 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.
Tencent Holding Ltd. is a member of our Computer and Technology group, which includes 610 different companies and currently sits at #5 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
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. Tencent Holding Ltd. is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for TCEHY's full-year earnings has moved 2.6% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
According to our latest data, TCEHY has moved about 10.6% on a year-to-date basis. Meanwhile, stocks in the Computer and Technology group have lost about 14% on average. This shows that Tencent Holding Ltd. is outperforming its peers so far this year.
One other Computer and Technology stock that has outperformed the sector so far this year is Domo (DOMO). The stock is up 16.2% year-to-date.
The consensus estimate for Domo's current year EPS has increased 5.6% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Tencent Holding Ltd. belongs to the Internet - Services industry, which includes 37 individual stocks and currently sits at #90 in the Zacks Industry Rank. On average, stocks in this group have lost 16.1% this year, meaning that TCEHY is performing better in terms of year-to-date returns.
Domo, however, belongs to the Internet - Software industry. Currently, this 170-stock industry is ranked #75. The industry has moved -12% so far this year.
Going forward, investors interested in Computer and Technology stocks should continue to pay close attention to Tencent Holding Ltd. and Domo as they could maintain their solid performance.
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