The summer conference season has drawn to a close for this year. What has become an annual trek for hedge funds, mutual funds, portfolio managers and other investors to have the opportunity to find out a new nugget or two on the top technology names often sheds an intense spotlight on the good, the bad and the ugly. There one was huge change this year, as Deutsche Bank wrapped up its annual technology conference.
In past years, especially since 2008, a majority of the companies have left the conference attendees with the message that they remained very cautious and buzzwords like “macro, Europe, limited visibility” were the norm. Not this year, the general tone of the attending companies was across the board positive, albeit moderate. In a new report, the Deutsche Bank team listed the stocks that are their top stocks to buy after attending the conference. We have broken them out by sector segment.
Ciena Corp. (NASDAQ: CIEN) is seeing a huge improvement in its U.S and European business from the carriers for its 100G transport, OTN and packet networking portfolio. The Deutsche Bank price target is $27, and the Thomson/First Call estimate is also $27.
Ruckus Wireless Inc. (NYSE: RKUS) is a favorite to maintain a healthy top line growth, with the increased popularity and success of its products and services in the Wi-Fi marketplace. Also, with the sustained shift from the use of PCs to smartphones and tablets, the need for Wi-Fi capacity and coverage solutions will steadily increase. The Deutsche Bank target price for the stock is $14 and should rise, while consensus for this top mid cap name is $23.
Qualcomm Inc. (NASDAQ: QCOM) continues to dominate the smartphone and tablet chip market. Added growth in China as carriers upgrade to TD-LTE should be significant. Deutsche Bank has an $80 target for this market leader, and the consensus target is $75.50. Investors are paid a 2.0% dividend.
NetApp Inc. (NASDAQ: NTAP) is the only hardware stock to be a top pick. The company commands a 14.9% market share in terms of revenue in the total data storage market, and it derives around 60% of its total revenue from its network attached storage segment. The virtual storage market is a pot of gold valued at $10 billion currently, with NetApp being one of the known players in this market. Deutsche Bank has placed a $50 target on the stock. The consensus stands at $45. Investors are paid a 1.4% dividend.
Trulia Inc. (NYSE: TRLA) was very bullish at the conference, citing very strong traffic trends. In fact its CFO said it has a waiting list for customers in sold-out markets and it was “massive.” The Deutsche Bank target price is set at $50, the same as the consensus target.
Yandex N.V. (NASDAQ: YNDX) is the Google of Russia. It was very bold on the growing marketplace there, and its beta tests of a new back end have been very positive and should be rolled out soon. Deutsche Bank has a $38 price target, and the consensus is $40, in U.S. dollars.
Avago Technologies Ltd. (NASDAQ: AVGO) will be a top benefactor in the explosion of wireless/LTE network growth. In addition, the company just upped its dividend 9.5%. Deutsche Bank has a $45 target for the stock, while consensus is pegged at $44.50. Investors are paid a 2.4% dividend.
Monolithic Power Systems Inc. (NASDAQ: MPWR) has a diverse market that includes communications, gaming and computing to continue to drive its growth, all markets that will pay a premium for its technology. The list of tech companies that use its chips is impressive. Deutsche Bank has a $30 target, the same as the consensus target.
Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is starting to show up as a stock to buy for many of the Wall Street firms we cover. The company was very bullish at the conference and cited a very solid demand environment that is expected to continue through next year. The Deutsche Bank target for the stock is placed at $92, while the consensus number is at $87.
Cornerstone OnDemand Inc. (NASDAQ: CSOD) is a company that provides talent management on the cloud via recruiting, learning, performance and outreach. During its most recent quarter, sales grew 66% year-over-year, but looking ahead, the company expects top line growth of 56% this year. Deutsche Bank has not started coverage, however the consensus target is at $55.
Salesforce.com Inc. (NYSE: CRM) continues to be one of the top stocks on Wall Street, continuing to confound short sellers. The company provides enterprise cloud computing solutions to various businesses and industries worldwide. Its service offerings include Sales Cloud, which enables companies to grow their sales pipelines, close deals, improve sales productivity and gain business insights; Service Cloud, which enables companies to connect with their customers and address their service and support needs; and Marketing Cloud for its customers to listen to conversations taking place on public social networks, such as Facebook, Twitter and blogs. The Deutsche Bank target for this incredibly hot stock is $58, and the consensus is at $54.
Deutsche Bank also listed Expedia Inc. (NASDAQ: EXPE), Fortinet Inc. (NASDAQ: FTNT) and Informatica Corp. (NASDAQ: INFA) as the three most controversial stocks. These three literally generated the most hallway, and probably bar-stool, debates at the conference.
Technology is changing at light-speed. Investors have seen companies that once dominated their niche become obsolete. The key to investing in technology is always to be looking at the way the public is embracing the technology. If it slowly, but surely becomes ubiquitous and everybody seems to want or have it, the companies providing it will be the next market leaders.
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