10 Best Emerging Tech Stocks to Buy Now

6. Methode Electronics Inc. (NYSE:MEI)

Market Capitalization as of September 11: $349.33 million

Number of Hedge Fund Holders: 24

Methode Electronics Inc. (NYSE:MEI) is a global manufacturer of electronic components and interconnect systems with engineering, manufacturing, and sales operations in more than 35 locations in 14 countries, employing ~4,566 people worldwide. It designs, manufactures, and distributes a range of products, like connectors, switches, and sensors, across industries like automotive, medical, consumer electronics, and industrial.

The company focuses greatly on meaningful expansions. In fiscal 2025, it has over 30 program launches planned. And in fiscal 2026, there are another 20 programs to launch. Such moves improve investor sentiments as well. 24 hedge funds hold a total of 1,548,283 shares in the company as of June 30. The largest stake amounted to $16,024,729 by D E Shaw.

The first quarter of the new fiscal year 2025 recorded $258.50 million in revenue. This represents a 10.77% year-over-year decline. The loss per share was $0.31. This drop was mainly due to the roll-off of a previously disclosed EV lighting program in the company’s Auto segment. EV related sales still made up 18% of the total revenue.

The company is focused on launching several new EV programs with Stellantis, which will help offset the decline from other programs. Management expects sales to remain flat in 2025 but grow in 2026.

Despite challenges, the new CEO, Jon DeGaynor, is confident in Methode Electronics Inc.’s (NYSE:MEI) ability to improve its operations and capture value-creation opportunities, positioning it for long-term success.

Here is what Heartland Value Plus Fund has to say about Methode Electronics, Inc. in its Q1 2021 investor letter:

“The portfolio’s IT holdings boosted results and we continue to find opportunities in a variety of industries in the space. Methode Electronics, Inc. (MEI) is a manufacturer of electronic controls and components primarily for the automobile and industrial end markets and is an example of the type of business we favor.

Shares of Methode advanced nearly 10% during the period following management reporting solid quarterly results and a robust sales forecast for 2022 along with improving margins.

The company offers an attractive mix of steady revenue from an established core business and rapid growth from its electric/hybrid vehicle, which may see sales double within the next year. Additionally, Methode’s management team has been aggressive in paying down debt and has optimized costs following recent acquisitions.

With Methode shares trading at 7.5x estimates of 2022 EV/EBITDA, we believe the company is an attractive opportunity to capture growing cash flows at a price that could mitigate downside risk.”