With the Jefferies Global Technology, Media and Telecom (TMT) conference in New York City wrapping up on Thursday, we wanted to give our readers an update on the stocks we mentioned last week as a prelude to the conference. Plus, solid research notes are coming out of the conference with additional stocks to buy.
Jefferies had asked all of their TMT analysts to present one controversial stock or theme ahead of the conference. They requested stocks or themes where the analysts felt that information or data presented at the conference may have an impact.
Micron Technology Inc. (NASDAQ: MU) was a featured stock. Always volatile, as DRAM chip pricing tends to fluctuate, Jefferies sees capacity restraint translating into long-term pricing stability. The Jefferies price target for this stock is $15. The Thomson/First Call consensus estimate is $12. The stock has traded up since last week and appears to be breaking a triple top at $10.25.
Cognizant Technology Solutions Corp, (NASDAQ: CTSH) was also a focus stock. Cognizant provides information technology (IT), consulting, and business process outsourcing services worldwide. The issue to be discussed was a pending immigration bill proposed in the Senate that could affect work visas for offshore hiring. Jefferies has a price target for this stock of $80. The consensus target is even higher at $86. The stock posted record earnings yesterday.
Workday Inc. (NYSE: WDAY) had a recent and highly successful initial public offering that hit the radar at Jefferies. The interest at the conference was in the corporate switch from old line HR companies like Automatic Data Processing Inc. (NASDAQ: ADP) handling HR/payroll outsourcing to new cloud-based competitors. Workday is a stock to buy, with a $76 price target. The consensus target is much lower at $60. Workday has traded up 5% since our story a week ago and was initiated as a stock to buy at Oppenheimer late yesterday with an $80 price target.
Red Hat Inc. (NYSE: RHT) was another stock that was looked at closely. The market fears that Red Hat’s strong growth rate may be slowing. Management was expected to outline the strength of current bookings and how Linux workloads are outperforming Windows workloads. The Jefferies price target for the stock is $65, while the consensus is lower at $59. Red Hat is also up more than 5% since our story last week.
Data networking and wireline equipment stocks were among featured sectors at the conference. Jefferies has three solid stocks to buy, but they did not post their price targets in the report.
Broadsoft Inc. (NASDAQ: BSFT) released earnings on Tuesday and beat expectations on the top and bottom line. The shift by enterprises from premise-based PBX solutions to cloud-based, mobile-centric unified communications is proving to be a significant opportunity for the company. The consensus target price for the stock is $31.
Calix Inc. (NYSE: CALX) impressed the Jefferies analysts in their presentation at the conference. Calix provides broadband communications access systems and software for fiber- and copper-based network architectures. The company has enjoyed a steady increase in gross margin from the low 30s to the high 40s, and believes this trend will continue to the low 50s. The consensus price target for the stock is $9.90.
Infinera Corp. (NASDAQ: INFN) provides optical networking equipment, software and services to communications service providers, Internet content providers, cable operators and subsea network operators worldwide. Their presentation at the conference was very positive on future growth prospects. The consensus price objective for the stock is $8.50, which is below where it is currently trading.
Often the featured stocks at a Wall Street firm’s conference trade higher as new or game-changing data is presented. Investors may want to keep their eyes open for names they like that are presenting at conferences this summer and in the future.