As momentum tech players have shifted to old-school value tech names, it could be because many are best positioned for the Internet of Things (IOT) era. A new report from Deutsche Bank highlights the top names that will dominate the IOT and will help unlock, in their estimation, trillions of dollars of value through cost efficiencies and new technologies. It comes as no surprise that the names that Deutsche Bank sees as leaders in this new growth are large, established industry icons.
Here are some of the top names from Deutsche Bank to buy for the Internet of Things surge in the coming years.
Ciena Corp. (NYSE: CIEN) is a company that many analysts, including the Deutsche Bank team, believe could be the top beneficiary of the increase in wireless spending. The company is rapidly reducing its losses, and the earnings growth outlook for the next five years is also quite promising. According to Yahoo! Finance, investors can expect Ciena’s earnings to improve at an annual rate of 16.7% for the next five years. The Deutsche Bank price target for the stock is $30. The Thomson/First Call estimate stands at $27.99. Ciena closed Tuesday at $18.66.
CommScope Holding Co. Inc. (NASDAQ: COMM) provides connectivity and infrastructure solutions for wireless, business enterprise and residential broadband networks in the United States, Europe, the Middle East, Africa, the Asia Pacific, Central and Latin America and Canada. The company operates in three segments: Wireless, Enterprise and Broadband. The company came public as a very successful 2013 IPO and has rallied recently after selling off after the deal. The Deutsche Bank price target is $30, and the consensus estimate is $30.46. The stock closed Tuesday at $26.88.
F5 Networks Inc. (NASDAQ: FFIV) has been on fire over the past six months, but a recent pullback that started in March may provide a better entry point for investors. The company provides solutions for an application-based world. F5 helps organizations seamlessly scale cloud, data center and software defined networking deployments to successfully deliver applications to anyone, anywhere, at any time. F5 solutions broaden the reach of information technology (IT) through an open, extensible framework and a rich partner ecosystem of leading technology and data center orchestration vendors. This approach lets customers pursue the infrastructure model that best fits their needs over time. The Deutsche Bank target for the stock is $135, and the consensus target is $121.91 Shares closed Tuesday at $103.16.
Infoblox Inc. (NYSE: BLOX) is another top stock in the Deutsche Bank report, but it is not classified as old value tech. The company delivers automated network control solutions, the fundamental technology that connects end users, devices and networks. These solutions enable approximately 7,100 enterprises and service providers to transform, secure and scale complex networks. The Deutsche Bank price target is $30, and the consensus target is $28.31. Infoblox closed Tuesday at $18.81.
Qualcomm Inc. (NASDAQ: QCOM) remains the 900-pound gorilla in the wireless space, despite its recent earnings miss. A new Qualcomm technology used to create a series of reliable, on-the-fly wireless networks at the South by Southwest Interactive conference may soon provide high-end mobile-device users across the United States with a new type of digital experience — one that combines their live presence and digital identity. The GIMBAL smartphone technology, which was just transferred from Qualcomm Labs to the chip maker’s retail services unit, may also prove a watershed for cellular consumers willing to trade location privacy for shopping deals and convenience. Investors are paid a 2.1% dividend. Deutsche Bank’s target price is $86. The consensus target is $84.84. Qualcomm closed Tuesday at $79.31.
Despite huge jumps in technology the past 10 years, most Wall Street firms’ technology analysts feel that the surface is just being scratched. The sheer amount of research and development dollars that major firms commit yearly is staggering. Staying with market leaders makes good sense for growth-oriented portfolios with above average risk tolerance.