Last week’s rally was extremely impressive, with Friday bursting out of the gate, taking stocks across the board higher. The tech sector acted very well, but one interesting side note was that some the bigger, high-profile companies didn’t rally as much as the lower price-to-earnings value tech companies that are more exposed to corporate spending.

We were intrigued by the strength of the value tech stocks, and we screened the Merrill Lynch data base for the companies in that part of the sector that were rated Buy. We found four top stocks rated Buy that fit the bill well and make good sense for investors now.

Apple

Apple Inc. (NASDAQ: AAPL) revolutionized personal technology with the introduction of the Macintosh in 1984, but UBS has removed it after a long stay on the firm’s Q-GARP list. Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, OS X, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud.

The stock has been hit hard since posting all-time highs last summer. Many portfolio managers may have added the blue chip technology giant as the stock dropped over 20% from the 2015 summer highs. A whopping 24 hedge funds own the stock now.

Top analysts note that many Apple suppliers did indeed pre-announce negative earnings, and some think there is potential risk to the estimates for the March quarter. Most remain comfortable with estimates for 45 million iPhones, and while the March quarter chatter could remain an issue, the long-term story remains in place, and should work well through the balance of 2016 and beyond.

Recent reports suggest that Taiwan Semiconductor Manufacturing will produce the next-generation system-on-chip design destined to power this year’s iPhone hardware refresh, beating out longtime Apple partner Samsung.

Apple investors receive a 2.03% dividend. The Merrill Lynch price target for the stock is $130, and the Thomson/ First Call consensus price objective is $134.11. The shares closed Friday at $93.70.

Cisco

One of the top mega-cap technology stock picks on Wall Street, Cisco Systems Inc. (NASDAQ: CSCO) posted outstanding earnings last month, and many on Wall Street have raised 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 won an important contract last year 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 are also adding to the total sales profile and product mix.

The company recently introduced its new network functions virtualization (NFV) infrastructure solution, combining virtual and physical environments and providing all the necessary compute, storage and networking infrastructure to run NFV network services. The ability to stay ahead of competition keeps Cisco at the forefront of technology and the competition.

Cisco investors receive a 3.73% dividend. The $27 Merrill Lynch price target is less than the consensus target of $29.02. Shares closed above the Merrill Lynch target on Friday at $27.86.
Intel

This top chip stock has traded sideways all last year and actually closed down from where the stock started 2015, but with $21 billion of cash on the books, the dividend looks very safe. Intel Corp. (NASDAQ: INTC) designs, manufactures, and sells integrated digital technology platforms worldwide.

The company’s platforms are used in various computing applications, including notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel purchased chip rival Altera last year for a massive $16.8 billion, and the deal finally closed on December 28. Some on Wall Street viewed the deal pessimistically, citing its high cost, aggressive growth assumptions on the part of Intel and the increase in debt. Others feel the addition will help Intel start to move away from the personal computer dependence. Intel’s acquisition of the company puts it into the traditional fabless market of programmable logic devices, and by 2020 50% of Altera’s product line could be manufactured at Intel facilities.

Intel’s NAND flash memory business has a strong focus on enterprise opportunities. Many on Wall Street think that the company’s new chip, which is a collaboration with Micron Technology called the 3D XPoint, could be primarily In-Memory compute in servers, and its launch should coincide with Intel’s Purley platform server launch in 2016.

Intel investors receive a 3.27% dividend. Merrill Lynch has a $36 price target, in line with the consensus target of $36.05. Shares closed Friday at $31.76.

Oracle

This top software stock has traded sideways since last summer but may be close to breaking out. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide.

The company licenses its Oracle Database software to customers. It is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data, while Oracle Fusion Middleware software helps build, deploy, secure, access and integrate business applications, as well as automate their business processes.

Trading at 14.98 times estimated 2016 earnings, and sporting a solid free cash flow yield, many analysts also feel that is the company’s 12C database cycle starts to contribute during calendar 2016, and the stock could very well be poised for what they term a breakout year. After recent investors meetings, some analysts raised fiscal year 2017 cloud margins to 66% from 63% and earnings per share to $2.80. Some also believe that the software giant may be on the verge of a multiyear database product cycle.

Oracle investors receive a 1.55% dividend. Merrill Lynch has a $48 price target. The consensus price objective is set at $43.50. The stock closed Friday at $38.95.

For more aggressive investors that remain a touch nervous about the market, these four stocks make very good sense to buy now. Paying solid dividends, and with very mature, well-positioned franchises, they will be around down the road.

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