While 2015 has been generally a frustrating year for investors, with all the indexes down except the Nasdaq, one good aspect is that the sideways-to-down trading has made stock prices more palatable at current levels. One area that held its own is information technology, networking and wireless. A new Deutsche Bank report sizes up this group and presents some top ideas for next year.

Deutsche Bank is focused on what it refers to as the “major IT spending dislocations” in 2016. The firm sees significant spending shifts that they feel will benefit some companies more than others. They analysts cite five top-pick stocks they feel will work the best in 2016.

Akamai Technologies

This stock has been hit hard since October and may be offering investors a very good entry point. Akamai Technologies Inc. (NASDAQ: AKAM) is the self-described global leader in content delivery network (CDN) services, making the Internet fast, reliable and secure for its customers. Its advanced Web performance, mobile performance, cloud security and media delivery solutions are revolutionizing how businesses optimize consumer, enterprise and entertainment experiences for any device, anywhere.

Deutsche Bank has made the stock its top large cap idea for 2016. The analysts point to huge financial opportunity in what they term over-the-top linear and on-demand TV as the media companies generate the next 10% of Internet video traffic. They point out this is above and beyond the 37% of Internet traffic volumes generated by Netflix. Also, trading at just seven times 2017 estimated EBITDA, the stock is dirt cheap.

The Deutsche Bank price target for the stock is $80, and the Thomson/First Call consensus target is $70.53. The shares closed Thursday at $53.70.

Cisco

This is a top mega-cap technology stock pick on Wall Street, and perhaps a surprising defensive pick for volatile markets like we have witnessed. Cisco Systems Inc. (NASDAQ: CSCO) posted disappointing earnings in November, and many on Wall Street have lowered their price targets for the networking giant significantly. Cisco is also one of the 24/7 Wall St. top 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. Deutsche Bank thinks 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 are also adding to the total sales profile and product mix.

Cisco investors are paid a very solid 3.14% dividend. Deutsche Bank has a $35 price target, and the consensus target is $30.36. The shares closed most recently at $26.77.
CommScope

This is another top play for investors that may be somewhat more under the radar. CommScope Holding Co. Inc. (NASDAQ: COMM) provides connectivity and infrastructure solutions for wireless, business enterprise and residential broadband networks in the United States and internationally. Its network infrastructure solutions help customers increase bandwidth, maximize existing capacity, improve network performance and availability, increase energy efficiency and simplify technology migration.

The company was granted early termination of the waiting period in connection with the previously announced agreement to acquire TE Connectivity’s telecom, enterprise and wireless businesses, and the deal finally closed in August. Deutsche Bank was positive about this acquisition. The analysts also feel that CommScope will benefit from the low teens spending growth in data center optical connectivity, and trading at nine times estimated 2017 earnings, the stock is also very cheap.

The Deutsche Bank price target is $35. The consensus target is $32.10. The stock closed on Thursday at $26.22.

F5 Networks

This stock also is down sharply from highs posted earlier this year, and it could be an outstanding value for aggressive accounts now. F5 Networks Inc. (NASDAQ: FFIV) helps organizations seamlessly scale cloud, data center, telecommunications and software defined networking (SDN) deployments to successfully deliver applications and services to anyone, anywhere, at any time.

F5 solutions broaden the reach of IT through an open, extensible framework and a rich partner ecosystem of leading technology and orchestration vendors. This approach lets the company’s customers pursue the infrastructure model that best fits their needs over time. The world’s largest businesses, service providers, government entities and consumer brands rely on the F5 offerings to stay ahead of cloud, security and mobility trends.

Deutsche Bank points out that software and security sales are likely to be as much as 40% to 50% of the company’s product revenues in 2016, and also notes that could be a key basis for re-rating the multiple. With the stock trading, less cash, at a low 12 times the Deutsche Bank 2017 estimated earnings, like the other top picks the company is cheap at current levels.

The $140 Deutsche Bank price target is higher than the consensus target of $125.28. The shares closed Thursday at $99.06.

Infinera

This is another solid play for investors in data networking. Infinera Corp. (NASDAQ: INFN) provides Intelligent Transport Networks for network operators, enabling reliable, easy to operate, high-capacity optical networks. It leverages its unique large-scale photonic integrated circuits to deliver innovative optical networking solutions for the most demanding network environments. Intelligent Transport Networks enable carriers, cloud network operators, governments and enterprises to automate, converge and scale their data center, metro, long-haul and subsea optical networks.

The company blew away earnings recently, and Deutsche Bank continues to recommend buying shares as Infinera is the firm’s top small cap pick. Revenues came in at $207.3 million, up 25% year over year and 3% ahead of Wall Street expectations. Infinera also provided forward guidance that was very strong.

Deutsche Bank points to the fact the company is leveraged to the data center interconnect market, making them another benefactor. The stock is the firm’s top small cap play for the huge spending for data center optical, which Deutsche Bank thinks will be $4 billion to $5 billion, as well as $5 billion to $6 billion for the metro spending.

The Deutsche Bank price objective is $28, and the consensus target is $26.45. The stock closed Thursday at $20.47, down almost 5%.

This huge spending growth could continue for years to come as demand across all the sector grows. These top stocks to buy for 2016 are more suitable for aggressive growth accounts that can tolerate a degree of volatility.

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