Technology

Merrill Lynch's Six Technology Supply Chain Stocks to Buy Now

Lee Jackson

Jabil Circuit Inc. (NYSE: JBL) is the ultimate outsourcing stock for technology and more. The company offers electronics and mechanical design, production, product management and aftermarket services to companies in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, solar, storage and telecommunications industries. Investors are paid a 1.6% dividend. The Merrill Lynch price target is $22, while the consensus is set at $20.13. Shares ended Tuesday at $19.97.

Sensata Technologies Holding N.V. (NYSE: ST) is a global industrial technology company and a leader in the development, manufacture and sale of sensors and controls. The Merrill Lynch analysts think that the company will de-lever its balance sheet using its strong projected cash flow. Lowering the debt service could make for stronger earnings in coming quarters. The Merrill Lynch price objective is $48, and the consensus figure is at $47.36. Sensata closed Tuesday at $44.69.

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Stratasys Ltd. (NASDAQ: SSYS) is a top name in the 3D printing area that has been so hot over the past two years. In an effort to build up its Makerbot awareness, the company decided to team up with eBay to utilize e-commerce to sell 3D printing services. The Merrill Lynch report pointed out that 3D printing remains at its early phase of growth, and they emphasized sales-based metrics over other valuation metrics. The Merrill Lynch price target is at $140, and the consensus for this high volatility name is $127.33. The stock closed Tuesday at $102.30.

Teradata Corp. (NYSE: TDC) is a global leader in analytic data platforms, marketing applications and consulting services, that helps organizations become more competitive by increasing the value of their data and customer relationships. The Merrill Lynch team is impressed with the company’s ability to generate strong free-cash-flow. Their price target for the stock is $52, and the consensus target is $46.31. Teradata shares closed at $44.06.

Technology, as many Wall Street firms predicted, has been a strong performer so far this year. These companies go as the overall industry does, and business is good. Adding one or two of these top names to an aggressive growth portfolio makes good sense for investors.

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