With second-quarter earnings season officially off to the races, many of the top Wall Street firms are handicapping stocks in front of earnings reports for their clients. In a new research report, Cowen is very positive on three software stocks that have been red hot this year.

The Cowen analysts anticipate a good overall second quarter for the software industry. Channel checks look positive, especially for business intelligence, big data and security. With the ancillary data crunched, the Cowen team are very positive on three top stocks to buy before the second-quarter earnings print. All are rated Outperform.

Qlik Technologies

This company is the top pick at Cowen, which is very bullish in front of the numbers. Qlik Technologies Inc. (NASDAQ: QLIK) QlikView Business Discovery platform lets people quickly bring data sources together to create dynamic visual applications that can be navigated and searched intuitively. QlikView uses Natural Analytics to reflect the way human curiosity searches and processes information, while delivering the enterprise manageability, governance and service offerings organizations require. The company’s products helped retailers during last year’s holiday season by providing them with timely and relevant information about inventory and stock, enabling purchasing managers to better anticipate demand and advise production teams.

Qlik Technologies was named in the spring the top “cross-industry” vendor in the KLAS Report, “Healthcare Analytics: Moving Toward the Continuum of Care,” for having the best understanding of health care analytics and for being considered one of the most important vendors to a customer’s organization in terms of its future business intelligence and analytic (BIA) plans.

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The Cowen analyst feels that company’s new Qlik Sense product, which has helped push the company in the BIA market, is seeing strong demand trends. The analyst also thinks that the company can beat by as much as $5 million in revenue, like the company did the past two quarters.

The Cowen price target for the stock is $43. The Thomson/First Call consensus price target is $38.96. The stock closed most recently at $37.81. The company is scheduled to report earnings July 23.

LogMein

Despite a big move higher, the Cowen analysts see more upside for this stock. LogMein Inc. (NASDAQ: LOGM) provides cloud-based services for individuals and businesses to securely connect to their workplace, colleagues and customers. It offers services, such as join.me, join.me pro and join.me enterprise, that are browser-based online meetings and screen sharing services; Cubby Basic, Cubby Pro and Cubby Enterprise, which are cloud-based file syncing, storage and sharing services; and LogMeIn Pro, a remote access service. The company also provides support services comprising LogMeIn Rescue and LogMeIn Rescue+Mobile, which are Web-based remote support and customer care services offering remote support via the Internet; and BoldChat, a Web-based live chat service that helps customer service staff to directly engage and provide assistance to visitors to their organization’s website.

The Cowen analyst Gregg Moskowitz, who is one of the best in the business, maintains that despite the strong move the stock has made this year, that there is still upside to revenues, booking and earnings per share. The bullish stance is because the company has been able to successfully monetize mobile by delivering seamless remote access, collaboration, management and support.

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The Cowen price target is $72, but the consensus target is lower at $70.11. The stock closed Wednesday at $64.06. It is expected to report results on July 23.

SolarWinds

This is another top software pick at Cowen, and it will report after the bell Thursday. SolarWinds Inc. (NYSE: SWI) offers enterprise-class network management products, including SolarWinds Network Performance Monitor, that monitors and analyzes network performance metrics for routers, switches, servers and other simple network management protocol enabled devices, as well as additional network management products for various network management issues.

The company focuses exclusively on information technology (IT) professionals and strives to eliminate the complexity that they have been forced to accept from traditional enterprise software vendors. SolarWinds delivers on this commitment with simplicity through products that are easy to find, buy, use and maintain while providing the power to address any IT management problem on any scale.

Moskowitz also covers this company and thinks that overall the stock trades at a significant discount to the growth potential, and with overall investor sentiment mixed, he believes an inline report will be just fine. Cowen does caution that it is difficult to do channel checks, but that recent trends, seasonality and the overall competitive landscape appear to be lining up in the stock’s favor.

The Cowen price target is $56 and the consensus is slightly higher at $58.50. The shares closed Wednesday at $46.60.

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These stocks have all been red hot over the past year, and buying in front of the numbers is only for very aggressive accounts. Investors may want to buy a partial position on the outside chance that the numbers disappoint, and add the balance on either a sell-off or a move higher.

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