Technology

SunTrust Pounds the Table on 4 Red-Hot TMT Stocks to Buy

Lee Jackson

Mimecast

This is a smaller and perhaps less known company that the SunTrust team is very positive on. Mimecast Ltd. (NASDAQ: MIME) provides cloud security and risk management services for corporate information and email.

The company offers Mimecast Email Security services, including targeted threat protection that extends traditional gateway security to protect organizations against targeted attacks and enables administrators and security specialists to monitor and report attempted attacks. Its URL Protect tackles threats from emails containing malicious links.

The company offers the latest capability of its Targeted Threat Protection service, Internal Email Protect, the first-to-market cloud-based security service providing threat capabilities for internally generated email. Internal Email Protect allows customers to detect and remediate security threats that originate from their users’ email accounts.

The SunTrust team is very upbeat on this company and noted this:

Our research suggests notable pick-up in demand activity. As businesses return to some normalcy, email/data protection and broader cyber resiliency initiatives are returning with renewed vigor. We believe Mimecast’s broadening platform is appealing to larger enterprises looking to migrate off legacy platforms. Expanded platform play is driving vendor consolidation opportunities in the mid market. We believe fiscal 2021 estimates are conservative. Renewed demand should lead to upside/improving financial trends.

The $56 SunTrust price target is in line with the $56.05 consensus figure. Mimecast stock closed on Wednesday at $38.95, up over 6% on the day.

Take-Two Interactive

This top video game producer and has cashed in with some super-hot titles. Take-Two Interactive Software Inc. (NASDAQ: TTWO) develops, publishes and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels, as well as under Private Division and Social Point labels.

Take-Two develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Redemption names through developing sequels, and it offers downloadable episodes, content and virtual currency, as well as releasing titles for smartphones and tablets. The company also develops brands in other genres, including the LA Noire, Bully and Manhunt franchises.

In addition, the company publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series and Borderlands labels. It publishes sports simulation titles, comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; and the Golf Club. Additionally, the company offers free-to-play mobile games, such as Dragon City and Monster Legends.

Take-Two was down sharply after the close yesterday, after reporting diluted earnings per share of $1.07 on revenue of $760.54 million. These both come in well above Wall Street’s estimates.

The SunTrust price target of $129 is just below the $132.41 consensus estimate. Take-Two stock closed above both levels on Wednesday at $146.84.

Given the big run for TMT stocks off the March lows, it makes sense for investors to scale capital into these top stocks. The economic numbers for the second quarter are going to be dreadful, but with the gradual reopening of businesses and the country, some sense of normalcy should start to return. That should give a more positive tone for the latter half of 2020.