As incredible as it seems, we have less than three full months left in 2016, and if the markets can hang in there we probably will post a mid to high single-digit gain for the year. Needless to say, the biggest issue overhanging the market will be the U.S. presidential election, now just a month away. The market doesn’t like uncertainty, and it’s looking like this election could go either way.
One sector that should continue to benefit from strong momentum is technology, and some of the companies that have been in sub-sectors that got knocked down, or have had a headline event, might be outstanding buys now. A series of new research reports from Stifel highlight four companies rated Buy that make very good sense for aggressive accounts now.
This stock has been on fire, and the analysts think it goes even higher. Commvault Systems Inc. (NASDAQ: CVLT) is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform modern data environments. With solutions and services delivered directly and through a worldwide network of partners and service providers, Commvault solutions comprise one of the industry’s leading portfolios in data protection and recovery, cloud, virtualization, archive, file sync and share.
The company’s exclusive single-platform architecture gives companies unprecedented control over data growth, costs and risk. Commvault’s Simpana software suite of products was designed to work together seamlessly from the ground up, sharing a single code and common function set, to deliver superlative data protection, archive, replication, search and resource management capabilities.
Stifel sees that company well positioned for what it calls “architectural shifts” in enterprise storage. The research report said this:
Commvault remains one of our top picks – driven by a positive view on fundamental upside (top/bottom-line – revenue growth into mid-teens w/ progression toward 20%+ EBIT%) and valuation re-rate. Despite strong performance in shares – +30% over past 3-months vs. S&P +3.5%; trading at 2+ year highs – we remain positive on the re-rate potential given Commvault’s positioning for hybrid cloud data mgmt and overall deepening strategic value.
The Stifel price target for the stock was raised to $68. The Wall Street consensus target is $57.36. Shares opened Friday at $55.76.
This company remains one of the top chip equipment picks across Wall Street. Lam Research Corp. (NASDAQ: LRCX) designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers plasma etch products that remove materials from the wafer to create the features and patterns of a device.
Many Wall Street analysts have highlighted the company and its peers as having a significant equipment opportunity from the NAND evolution as well. Lam Research also appears well positioned to gain share in the wafer fab equipment (WFE) market, driven by a strong focus on technology inflection spending over the next few years.
Despite so-so foundry and logic spending in the past year, many on Wall Street think that Lam Research also will continue to benefit from technology transitions such as FinFET, 3D NAND, multi patterning and advanced packaging in 2015 and beyond. Many analysts believe it is the “cleanest” semi cap story benefiting from cyclical tailwind, SAM expansion and share gains.
The company recently made the decision to terminate its deal to acquire KLA-Tencor when it became clear that regulators probably would not approve the deal in the United States, and it was looking troublesome in other areas of the world. The companies walk away with no break-up fee imposed, and Stifel feels that Lam will continue to excel on its own.
Shareholders receive a 1.3% dividend. The $102 Stifel price target compares with the consensus posted at $101.39 and the $99.75 share price Friday morning.