Deutsche Bank Top IT Tech Trades for the Rest of 2014

By Lee Jackson Published Oct 14, 8:45AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

There are clearly areas that money is pouring into in the technology sector, regardless of what the dollar’s strength is or how slow European growth is. Next generation security, data center switching and cloud build-outs continue to dominate IT spending, and they should continue to going forward. The Deutsche Bank IT technology analysts see a divergence in IT spending, and those three top categories are all expected to do well. In a new report they also highlight their top trade ideas to exploit that growth.

The Deutsche Bank team highlights three top tech picks in their report. These are the stocks they feel will benefit the most from the increases in spending.

Cisco Systems Inc. (NASDAQ: CSCO) dominance in wireless equipment and the fact that the stock is just plain cheap, makes it a top name to buy at Deutsche Bank. While the analysts feel that there may be some weakness in telecom routing, they see the company as a big benefactor of the security, switching and cloud expenditures. They also see stock buybacks and operating expense cuts as a positive for earnings next year, as well as margin expansion from added software and cloud services. The Deutsche Bank team also views the integration of F5 Networks services into Cisco’s products as a plus for both companies and a leg-up with NSX integration.

Cisco investors are paid a 3.25% dividend. The Deutsche Bank price target for the stock is $30, and the consensus target is much lower at $26.31. The stock closed Monday at $22.93 a share.

ALSO READ: The 10 Safest High-Yield Dividends

F5 Networks Inc. (NASDAQ: FFIV) is a stock that the Deutsche Bank analyst feel will beat earnings expectations when it next reports. The company provides solutions for an application-based world. It helps organizations seamlessly scale cloud, data center and software defined networking deployments to successfully deliver applications to anyone, anywhere at any time. These are the areas, along with security, in which the Deutsche Bank team sees possible big orders

Wall Street analysts checks at the recent VMWorld conference point to a number of incremental revenue drivers for F5 Networks, especially when related to VMware directly. These include the company’s integration with VMware’s Virtual Desktop Infrastructure solution and F5’s launch of a key component of its BIG-IQ solution by the end of calendar 2014.

The Deutsche Bank price target is a massive $150, and the consensus target is posted at $125.49. The stock closed Monday at $109.10.

Mavenir Systems Inc. (NYSE: MVNR) is a leading provider of software-based communications solutions that enable mobile service providers to deliver high-quality Internet protocol-based voice, video, rich communication and enhanced messaging services to its subscribers globally. Mavenir’s mOne software platform has enabled leading mobile service providers to introduce the industry’s first live network deployment of Voice-Over-LTE and the industry’s first live deployment of next-generation Rich Communication Services 5.0. This is an area the Deutsche Bank team feels can generate significant spending by the major telecoms on the company’s software.

The Deutsche Bank price target is $18. The consensus price target is at $17. Mavenir closed Monday at $10.08. A move to the target price would be a huge 73% gain for shareholders.

ALSO READ: 13 Stocks Under $10 With Major Upside Calls

These three trades are very timely for investors with aggressive accounts. The recent sell-off tagged high beta names and the price points now are superb entry levels for a trade. Those who are more cautious may want to buy 50% now and see how the rest of the week trades.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.