Technology

Analyst Picks Stocks to Buy for a Projected IT Spending Recovery

Despite the recent turbulence in the market, some very good data is starting to emerge that could give tech stocks a nice second-half tailwind. A Cowen survey that targeted 100 U.S. based enterprise clients points to solid demand trends in banking, financial services and insurance, as well as manufacturing verticals, with an expected spending recovery in retail. Results also point to large contract renewal activity in 2014 impacting a host of the top technology vendors.

With renewed spending and contract renewals coming up, the new research report from the Cowen team has a list of top stocks to buy that look to benefit from this increased spending in the second half of 2014. Here are the stocks rated Outperform.

Computer Sciences Corp. (NYSE: CSC) has posted decent results, and yet the stock still has a hard time gaining much traction, despite moving higher. The company has shifted its focus from infrastructure sales to more profitable software and services. Last year it purchased big-data rival Infochimps in an effort to expand its platform and revenues.

While in longer term CSC faces structural competitive challenges, near term the company has a solid book of business, and management is taken steps, such as offshoring, to reduce operating expenses. Investors are paid a 1.4% dividend. The Cowen price target for the stock is $75. The Thomson/First Call consensus price objective is $64.83. Shares closed Thursday at $62.71 a share.

ALSO READ: Top Gold Stocks to Buy for the Rest of 2014

Cognizant Technology Solutions Corp. (NASDAQ: CTSH) provides information technology (IT), consulting and business process outsourcing services worldwide, such as IT strategy, program management, operations improvement, strategy and business consulting services. The company operates through four segments: Financial Services; Healthcare; Manufacturing, Retail and Logistics; and Other. The Cowen price target is $55, and the consensus target is $56.20. Shares ended Thursday at $50.01.

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