We have written in the past how the summer months are the Wall Street conference playground months, and this year is no exception. The good thing about the conferences for investors is that a considerable backstory data and anecdotal information on top stocks to buy often comes out. In a new research report from Merrill Lynch, we found out that their recent technology conference was well attended and a sense of cautious optimism prevailed. Strong secular stories and reports of good demand were plentiful.
In their report, Merrill Lynch focused on six technology supply companies that are rated Buy, and have very positive prospects not only for the balance of the year, but into next year as well.
Corning Inc. (NYSE: GLW) may be poised for a big second half of the year as bandwidth and latency needs in the Internet are pressing the limits of what is currently available. Merrill Lynch also sees big demand for the company’s Gorilla Glass, up as much as 30% year-over year as new smartphones hit the market. While the company is well-known for being a leading manufacturer of glass substrates for LCDs in consumer electronics, it generates close to 30% of its revenue from its Optical Communication segment. In 2013, the Optical Communication division revenue grew 9.2% to reach $2.3 billion. Investors are paid a 1.9% dividend. Merrill Lynch has a $24 price target, and the consensus target is $22. Corning closed Tuesday at $21.28 a share.
Flextronics International Inc. (NASDAQ: FLEX) is a company that assembles many components needed in the Internet of Things. While there is a degree of concern that Lenovo could in-source Motorola Mobility, the overall effect on earnings is expected to be minimal. Over the years, Flextronics has restructured and refined its footprint and information systems, and it has expanded into key end markets such as automotive and medical, which has helped to diversify revenue. The Merrill Lynch price target is $12.50, and the consensus is at $11.01. The stock closed Tuesday at $11.16.