Red-Hot Technology Companies Added to Stifel’s Select List Portfolio

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With the earnings for the second quarter now almost completely over, the top firms we cover on Wall Street are getting a look at how things are shaping up for the third quarter and the rest of 2017. One thing seems obvious, many of the top firms still favor the top-performing tech stocks, and the team at Stifel is no exception.

A new research report from the firm reveals some big changes to Stifel’s Select List portfolio, which is a collection of the highest conviction stock selections from the analysts. They added six new companies and three are very hot technology stocks. We also cover two additional companies that look like solid plays now.

Adobe Systems

This high-profile, old-school software company is added to the list and has posted outstanding earnings. Adobe Systems Inc. (NASDAQ: ADBE) operates in three segments. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote and monetize their digital content. The other segments are Digital Marketing and Print and Publishing.

Top analysts feel there are an additional 11.7 million potential users, driven by growth in the creative community, student and teacher penetration and conversions from the piracy. Market and value expansion provide additional upside. The company posted outstanding second quarter numbers and the rest of the year looks very solid,

Adobe is also reasonably safe route for investors looking to own a company with a marketing automation product, which has become huge. Adobe has a partnership with Microsoft as well.

Stifel raised its price target on the stock to $163 from $150. The Wall Street consensus target was last seen at $159.06, and the shares closed on Wednesday at $151.10.

Alibaba

Almost three years ago, this company was the hottest thing on the planet and getting ready to come public. Alibaba Group Holding Ltd. (NYSE: BABA) runs the largest retail marketplaces (Taobao, TMall) and leading B2B sites (Alibaba.com, 1688.com) in China and Lazada in Southeast Asia. It collects revenues mainly from commissions, marketing services, subscription fees, cloud computing and software, as well as other value-added services. It also owns media and partners with logistics and payment companies to offer delivery, warehousing, payment and financing services for its market participants.

Plain and simple, the dominance in Alibaba’s core business, the very hard barrier to entry for competition and new growth opportunities like cross-border e-commerce make the stock extremely attractive. With most of the damage to the China equity markets seemingly subsided for now, the residual effect to the company may subside some.

The company recently reported huge quarterly numbers, and the driving force for some of the outperformance included social features, customized mobile app for users, cross-platform user tracking and ad targeting for merchants. In fact, growth returned to the levels the company was at when it went public.

Stifel has set its price target at $190, which is essentially in line with the consensus estimate of $190.68. The stock closed Wednesday at $175.80 a share.