Technology

Institutional Buyers Loading the Boat on 5 Red-Hot Tech Stocks

Lee Jackson

Published: October 25, 2017 10:00 am

Last Updated: January 12, 2020 6:50 am

You have heard the old adage, “follow the money,” and if there was ever a place to do that, it is when investors are trading stocks. Even though it seems like an oxymoron, there truly is “smart money” on Wall Street, and they have a million ways to find the top stocks to buy. Two of the newest are through big data and artificial intelligence.

We are always curious what stocks are being bought at some of the companies we cover on Wall Street. With tech continuing to be a top sector in the S&P 500, it seems as though the top mutual funds and hedge funds are not only sticking with their top holdings and riding the gains, but they are willing to add shares and defend the positions on a dip.

A new SunTrust research report noted the “Best to Buy” companies from the firm’s trade desk recently, and five top technology companies stand out. All are suitable for aggressive growth accounts with risk tolerance.

Applied Materials

Some on Wall Street feel this semiconductor capital equipment leader has the broadest range of exposure to 3D NAND and foundry display. Applied Materials Inc. (NASDAQ: AMAT) is the global leader in precision materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries. Applied Material’s technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to consumers and businesses around the world.

Many analysts expect that the industry NAND supply will be up a high 30% in calendar 2017 and approaching near 50% in calendar 2018 as well, with underlying demand drivers remaining solid. Continued supply growth and technology transitions should bode well for semi-cap companies.

Shareholders receive a 0.71% dividend. The Wall Street consensus price target for the stock is $58.90. The shares closed Tuesday at $56.38.

Cypress Semiconductor

This stock traded in a tight range from March until last month, but it looks to be breaking out. Cypress Semiconductor Corp. (NASDAQ: CY) manufactures and sells embedded system solutions for the automotive, industrial, home automation and appliances, consumer electronics and medical markets.

Its product portfolio includes programmable-systems-on-chip (PSoC), general purpose microcontrollers, analog integrated circuits, USB controllers, connectivity chips (Bluetooth, Wi-Fi, Zigbee) and memory chips.

The company has continued an expansion of its automotive portfolio, which will help enable manufacturers to bring high-tech automotive systems historically available only in luxury models to mainstream vehicles. Leveraging a wide range of differentiated products that includes microcontrollers, power management integrated circuits, memories and touch-sensing solutions, the portfolio enables value-added systems for Cypress’s top-tier automotive customers.

Shareholders receive a 2.78% dividend. The posted consensus price target is $17.55. Shares closed most recently at $15.85.

24/7 Wall St.
4 Stocks to Buy as Huge Margins Drive Semiconductor Earnings Higher

Micron Technology

Micron Technology Inc. (NASDAQ: MU) is a global leader in advanced semiconductor systems. Its broad portfolio of high-performance memory technologies, including DRAM, NAND and NOR flash, is the basis for solid state drives, modules, multichip packages and other system solutions. Its memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.

Micron and Intel announced last year the availability of their 3D NAND technology, the world’s highest-density flash memory. Flash is the storage technology used inside the lightest laptops, fastest data centers and nearly every cell phone, tablet and mobile device.

The company recently announced a massive secondary offering that will be used to retire a stunning $2.25 billion in outstanding debt. While clearly the added shares will present dilution, the elimination of the debt service equals up the score for the company on the balance sheet. The chip maker said it will redeem all $1.25 billion of its outstanding 7.5% notes due 2023, as well as $1 billion of 5.25% notes due 2023.

The consensus price target for this white-hot stock is $50.45. Shares closed most recently at $41.60.

Integrated Device Technology

This top company has traded solidly higher this year and looks ready to break out to the upside. Integrated Device Technology Inc. (NASDAQ: IDTI) develops a broad range of low-power, high-performance mixed-signal semiconductor products for the communications, computing, consumer, automotive and industrial markets.

The company’s product portfolio includes various timing, interface, power management and RF solutions that are used in areas such as 4G infrastructure, network communications, cloud data centers, as well as in other computing and mobile devices.

The posted consensus price target is $29.17, and the stock closed trading most recently at $28.54.

Seagate Technology

This company has probably one of the most disliked tech stocks, and it is still down over 20% since April. Seagate Technology PLC (NASDAQ: STX) designs, manufactures and sells electronic data storage products in the Asia-Pacific, the Americas and EMEA (Europe, Middle East and Africa) countries.

The company provides hard disk drives, solid state hybrid drives, solid state drives, PCIe cards and serial advanced technology architecture controllers that are designed for enterprise servers and storage systems in mission critical and nearline applications, as well as for client compute applications comprising desktop and mobile computing.

Seagate shocked Wall Street this week when it posted results that blew away estimates and sent the share rocketing higher. The posted earnings per share for its fiscal first quarter of 2018 were less than in the same period last year, but it came in well above the Wall Street earnings estimate for the quarter. The company also reported revenue that was lower than in its fiscal first quarter of 2017, but again much better than the analysts expected.

Many think at current levels the stock is still a candidate for a leveraged buyout. That would make the second time in the past 20 years the company has been taken private, and after the rebound in earnings, it could indeed be in play.

Investors are paid a huge 6.5% dividend that could be subject to being cut. The consensus price target was last seen at $36.95 and could be going higher soon. The shares ended Tuesday’s trading at $38.84 apiece.

These five stocks are being bought now by some of the top money managers on Wall Street. While it may make sense to watch the rest of the earnings come in, all these stocks look poised to finish 2017 and head in to 2018 in good shape.