One thing investors need to continue to scour the market for is stocks that are still relatively cheap in a very expensive market. One good place to look in technology is the communications equipment stocks. A new report from UBS notes that the top stocks in the firm’s universe have pulled back over the past two weeks over various macro concerns and may be offering investors a very solid entry point.

With capital expenditures at the service providers and cable companies hopefully bottoming out in the first quarter, the UBS team is very positive on the set-up for the top companies through the rest of this year. While some may benefit more than others, all the companies rated Buy at UBS currently make good sense for aggressive growth accounts.

Ciena

This company is a leading maker of fiber optic networking equipment sold to telecom carriers. Ciena Corp. (NYSE: CIEN) is expected to get a large chunk of the Verizon 100G network build-out, with some analysts thinking the company could see as much as 30% of the total. Some firms think that Verizon could end up being as much as a 10% customer next year.

Ciena leverages its deep expertise in packet and optical networking and distributed software automation to deliver solutions in alignment with its OPn architecture for next-generation networks. The company enables a high-scale, programmable infrastructure that can be controlled and adapted by network-level applications and provide open interfaces to coordinate computing, storage and network resources in a unified, virtualized environment.

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In addition to the Verizon deal, a majority of Enterprise and Web/cloud data centers are in the process of running high-speed 40/100G optical interconnects between their data centers. This could also mean added business for Ciena.

The UBS price target for the stock is $30. The Thomson/First Call consensus price target is $28.09. Shares closed on Thursday at $25.27.
Cisco Systems

This is the top mega-cap technology stock pick on Wall Street, and perhaps another surprising defensive pick. Cisco Systems Inc. (NASDAQ: CSCO) is trading at a low 12.4 estimated 2015 earnings and boasts an outstanding 7.4% free cash flow yield. The networking giant also seems to have fought through numerous headwinds, including up and down demand from telecom carriers, weakness in emerging markets and threats to its very lucrative switching business. Cisco is also one of the 24/7 Wall St. 10 stocks to own for the next decade.

Cisco earlier this year won an important contract for the Verizon build-out of the company’s next-generation 100G metro network. While Cisco’s optical business is small as a part of total revenue, this win is seen by Wall Street as a significant endorsement of the investments Cisco has made into its optics business.

Analysts across Wall Street point to an estimated double-digit bookings momentum for Cisco’s Meraki Cloud Services. Many think that Meraki is likely to be a $1 billion plus run-rate business this year, with an incredible 50% to 70% compounded annual growth rate. A jump from 40 GE to 100 GE data center switching and next generation security also are adding to the total sales profile and product mix.

Cisco investors are paid a very solid 3% dividend. The UBS price target is posted at $33, and the consensus target is $31.45. Shares closed Thursday at $28.32.

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JDS Uniphase

This company was a pioneer of the optical revolution that began in the 1990s, and it announced last year a plan to become two separate companies. JDS Uniphase Corp. (NASDAQ: JDSU) will be splitting into an optical and laser company and also a network and service enablement company. Many Wall Street analysts have felt that this is a very positive catalyst for shareholders. In addition, company management remains very confident about the prospects of the business as the need for bandwidth across the world increases. As a result, the company is seeing strong demand in the Americas for its 100G products and LTE solutions.

The UBS team points out the Datacom momentum is growing as the company has started going direct to large data centers utilizing the 40G/100G products. The spin-off should be completed by the third quarter of this year.

Recent analyst discussions with the company have been centered on the growth potential of JDSU’s fiber laser offering, which generated an annualized $60 million in revenue in the most recent quarter. The newest generation of offerings has 2, 4 and 6 kilowatts of output power. Some on Wall Street have also hinted at a possible Finisar and JDS Uniphase transaction or merger.

The $17 UBS price objective is much higher than the consensus target of $13.73. The stock closed trading Thursday at $11.17 per share.

Juniper Networks

This solid technology stock has been a long roller-coaster ride for investors over the past two years. Juniper Networks Inc. (NYSE: JNPR) has seen the combination of positive activist shareholders moves combined with a solid product cycle, which has made the stock a recent favorite again, so its trip to the woodshed last year may be just the ticket for investors looking to buy shares, despite the big move made off the lows that were printed last fall. The company has a big presence in network and enterprise security and could possibly be a merger or straight out takeover target.

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Juniper and Mirantis announced in the spring an expanded engineering partnership that provides customers with a reliable, open-source software-defined networking (SDN) fabric to deploy OpenStack clouds at scale. According to a recent report by 451 Research, the OpenStack market size is estimated to reach $1.7 billion by 2016. Enterprises and service providers are increasingly looking to open-source software for its increased flexibility, cost savings, no vendor lock-in and the ability to customize integration with other infrastructure and applications.

Juniper investors are paid a 1.53% dividend. The UBS price objective is $28, but the consensus is much lower at $26.26. The stock closed Thursday at $26.35 per share.

TE Connectivity

This stock is down a whopping 10% in the past two weeks. TE Connectivity Ltd. (NYSE: TEL) designs and manufactures products at the heart of electronic connections for the world’s leading industries, including automotive, energy and industrial, broadband communications, consumer devices, health care and aerospace and defense. TE has a long-standing commitment to innovation and engineering excellence, which helps its customers solve the need for more energy efficiency, always-on communications and ever-increasing productivity demands.

The UBS team is bullish on the stock due to the increasing electronic content in automotive, industrial, consumer and defense industries. They also cite the stock’s very reasonable valuation and the high-growth auto sensor business helping to ramp up sales and earnings.

TE investors are paid a solid 2.1% dividend. The UBS target price is set at $80, and the consensus target is $77.64. The stock closed Thursday at $62.79.

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With earnings for JDSU, Juniper and TE right around the corner, the UBS team is positive in front of the numbers on the stocks. Aggressive investors may want to consider a partial buy before earnings are announced.

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