Technology

3 Tech Hardware Stocks to Buy With Huge Potential Upside

If you combine the end of the quarter with the groundhog day Greece debacle, that is about all that was needed to have a tipping point. The good thing is Wall Street has already priced down second-quarter earnings, and top information technology hardware stocks have been beaten down all year. In a new report, Jefferies says three top stocks to buy may be putting in an important bottom and could be outstanding buys here.

While there could be more selling coming our way, and a shortened holiday trading week does not help, the three hardware stocks the Jefferies team likes have already taken a beating on personal computer (PC) sales concerns. Toss in the Micron blow-up, and you have the perfect recipe for buying stocks when the proverbial blood is in the streets.

The Jefferies analysts do trim the numbers and revise price targets, but they remind investors that a PC rebound is a second half story. With Windows 10 making a fall debut, and transitions to new and more profitable business silos, patient investors could make some big money.

Hewlett-Packard

This old-school tech stock has been sold off all year as investors have felt that the PC slowdown in sales could continue to hurt earnings. Hewlett-Packard Co. (NYSE: HPQ) stock is down a whopping 25% year to date and trades at a very low 8.2 times 2015 estimated earnings. Some Wall Street analysts feel that weak PC demand could continue to negatively impact revenue and free cash flow at the company. The recent decline in the stock may represent investors already discounting what could be a very so-so fiscal third quarter from the Silicon Valley icon when it reports in late August. HP does a large 65% of sales to foreign accounts, and the strong dollar could be finally topping out after a long run.

The company is focused on splitting into two entities, a move many analysts have applauded. One company, to be named Hewlett-Packard Enterprise, will focus on selling technology like servers and data center gear to businesses. The other, to be called HP Inc., will sell printers and personal computers. The Jefferies team feels that the company has the least downside risk of the three featured in the report.

ALSO READ: 4 Stocks to Buy With Potentially Big Upcoming Catalysts

HP investors are paid a 2.35% dividend. Jefferies has a very solid $40.50 price target for the stock. The Thomson/First Call consensus target is $40.65. Shares closed Monday at $29.97.

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