To say that hedge fund and mutual fund managers tend to follow the herd is quite an understatement, and always has been. While publicly they sometimes seem reluctant to discuss their holdings, especially stocks they are short sellers of, the reality is managers tend to talk among themselves as they run in the same circles, and often the discussions focus on their portfolios and what is in them.

A new Jefferies research report looks at the hedge fund holdings from the high turnover or “fast money” crew. The portfolio managers added eight new stocks, and the following five look like outstanding ideas for aggressive growth investors. They all have Buy ratings at top Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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AMD

This top semiconductor stock has roared back after posting outstanding earnings. Advanced Micro Devices Inc. (NYSE: AMD) operates as a semiconductor company worldwide. Its products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services. They also include server and embedded processors, and semi-custom system-on-chip products, development services and technology for game consoles.

The company provides the following:

• x86 microprocessors for desktop PCs under the AMD Ryzen, AMD Ryzen PRO, Ryzen, Threadripper, AMD A-Series, AMD FX, AMD Athlon, AMD Athlon PRO and AMD Pro A-Series processors brands
• Microprocessors for notebook and 2-in-1s under the AMD Ryzen, AMD A-Series, AMD Athlon, AMD Ryzen PRO, AMD Athlon PRO and AMD Pro A-Series processors brands
• Microprocessors for servers under the AMD EPYC and AMD Opteron brands
• And chipsets under the AMD trademark

The company reported outstanding quarterly results, with data center revenue doubling, and some on Wall Street see a price objective with a path to long-term earnings per share of $4 or more. Toss in solid market share gains in the first quarter, and the chip giant could be poised for a strong second half.

Goldman Sachs has its price target for Advanced Micro Devices stock set at $130. The Wall Street consensus target is $114.37, and the final trade for Monday came in at $111.32 a share.

This stock could very well continue to benefit from the increase in information technology and 5G spending. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal-processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide.
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The company offers signal-processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

Analog Devices has among the best end-market exposure, with high communications and aerospace/defense market exposure, in addition to offering investors a powerful 5G content growth story. Plus, acquisitions over the past few years like Linear Technology and Hittite Microwave should provide revenue and additional cost synergies that are still coming.

Investors receive a 1.55% dividend. The Jefferies price target of $186 is well above the $164.02 consensus target. Analog Devices stock closed on Monday at $166.98.

Nuance Communications

While somewhat more off the radar, this top company looks poised to break out in a big way. Nuance Communications Inc. (NASDAQ: NUAN) provides conversational and cognitive artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze and respond to people, amplifying human intelligence to increase productivity and security.

The Nuance Communications Healthcare segment provides clinical speech and clinical language understanding solutions that improve the clinical documentation process, from capturing the complete patient record to improving clinical documentation and quality measures for reimbursement. Its solutions include Dragon Medical One, cloud-based speech solution; computer-assisted physician documentation; diagnostic imaging solutions; Nuance Dragon Ambient eXperience, a voice-enabled solution; and clinical documentation improvement and coding.

The company’s Enterprise segment primarily engages in using speech, natural language understanding, and AI to provide automated customer solutions and services for voice, mobile, web and messaging channels. Its solutions include intelligent engagement solutions; Conversational AI; Engagement AI; and Security AI. Its Other segment provides voicemail transcription services. The company serves organizations across health care, financial services, telecommunications, government and retail.

The $56 SVB Leerink price target is nearly in line with the $56.80 consensus target on Nuance Communications stock. The stock closed at $55.08 on Monday.

This company blew away Wall Street last year with a gigantic $27.7 billion purchase of Slack Technologies. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.
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Salesforce’s enterprise cloud computing applications and platform services include Sales Cloud, which enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices, and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

Top analysts feel that Salesforce remains poised to be one of the most strategic application software companies in the $1 trillion total addressable market cloud industry, with a broad and expanding platform that spans sales, service, e-commerce, marketing, business intelligence/analytics, AI, custom applications, integration and collaboration. Many also view Salesforce as positioned well to capitalize on accelerated digital transformation spending.

Truist Securities has a $300 price target, and the consensus target is $294.91 a share. Salesforce.com stock closed on Monday at $264.97.

Xilinx

This has remained a takeover candidate for years. Xilinx Inc. (NASDAQ: XLNX) is a leading fabless supplier of high-density programmable logic devices (PLDs), which are standard integrated circuits that offer significant advantages over custom logic chips, such as application-specific integrated circuits. They are used extensively in key end markets such as communications.

The company’s programmable devices comprise integrated circuits (ICs) in the form of PLDs, such as programmable system on chips and three-dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores.

Xilinx also offers development boards; development kits, including hardware, design tools, IP and reference designs that are designed to streamline and accelerate the development of domain-specific and market-specific applications; and configuration products, such as one-time programmable and in-system programmable storage devices to configure field programmable gate arrays.

Jefferies has set a $169 price target on Xilinx stock. The consensus target of $147.07 is less than Monday’s close at $155.07 per share.

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The fact that these are among the top new additions for high-turnover hedge funds means that the portfolio managers buying and adding the shares see upside from levels printed recently. Shares of these strong companies are great additions to aggressive growth portfolios.

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