5 Tech Stocks to Buy With Exposure Outside the US

By Lee Jackson Published Feb 20, 9:05AM EST

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As the dollar has raced to new highs against almost every other currency, equity strategists have urged investors to buy stock in companies that primarily do business in the United States, as foreign exposure is more costly. While good advice for last year, it may be time to look for stocks with more international exposure. A new research note from Jefferies makes the case that it is time for stocks with international exposure to begin to outperform.

The Jefferies research shows that internationally exposed cyclical U.S. industry groups are starting to outperform domestically exposed groups. The analysts maintain that any weakening in the dollar would be helpful, but dollar stability is the key. This makes sense as foreign economies, especially in Europe, are starting to perk up.

The five top technology names highlighted in the Jefferies research that have a substantial amount of non-U.S. business are Check Point Software Technologies Ltd. (NASDAQ: CHKP), Google Inc. (NASDAQ: GOOGL), Priceline Group Inc. (NASDAQ: PCLN), Qlik Technologies Inc. (NASDAQ: QLIK) and VMware Inc. (NYSE: VMW). All are rated Buy at Jefferies.

Check Point Software Technologies

With a 53.5% international exposure, this remains one of the top tech stocks to buy on Wall Street for a security presence. The Jefferies analysts, like many on Wall Street, think the company is one of the best in helping customers protect against advanced persistent threats.

Check Point is considered a worldwide leader in securing the Internet, providing customers with uncompromised protection against all types of threats, reducing security complexity and lowering the total cost of ownership. Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology. This week the company bought Israeli start-up Hyperwise, saying it will help it compete even better in the fast-growing cybersecurity market.

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The Jefferies price target for the stock is $85. The Thomson/First Call consensus estimate is set at $85.53. Shares closed Thursday at $81.20.

Google

This mega-cap tech stock that the Jefferies analysts favor has 57.8% international business, and the stock is trading at levels that may offer long-term investors a solid entry point. The company posted solid but not spectacular fourth-quarter results that were good enough to lift it off a 52-week low.

The company recently announced a partnership with Lending Club the world’s largest online marketplace, connecting borrowers and investors to facilitate low-interest financing to eligible Google partners. The program leverages Lending Club’s ability to provide access to credit in a highly automated, cost-efficient manner, and it allows Google to purchase the loans, thus investing its own capital in its partner network to drive business growth. Lending Club will service the loans.

The Jefferies price target for the search colossus is posted at a whopping $660.The consensus figure is posted at $645. Google closed Thursday at $542.87.

Priceline

Priceline does a whopping 73.9% international business, and it is one of the highest rated Internet stocks on Wall Street, with a strong 4.7 rating out of 5 by all analysts covering the stock. The online booking service posted outstanding earnings this week, with revenue of $1.84 billion in the period, which topped Street forecasts of $1.8 billion, and added $3 billion to the company stock buy-back program. The stock has had a rough start to 2015, down over 1.5% and should get back on a more firm footing after the solid earnings report.

The company’s products include Booking.com, which provides online hotel reservation services on a worldwide basis, with approximately 425,000 properties in 190 countries and territories available in 42 languages. Others include Agoda.com, an Asia-based online hotel reservation service available in 38 languages, and rentalcars.com, which offers car rental services in approximately 6,000 locations worldwide.

Jefferies has a price target of $1,325, while the consensus target is $1,301.36. Shares close trading on Thursday at $1,218, up a huge 8.46%.

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Qlik Technologies

With a big 62.9% international exposure, this is another fast-rising tech name with a big buzz on Wall Street. The company’s QlikView Business Discovery platform lets people quickly bring data sources together to create dynamic visual applications that can be navigated and searched intuitively. QlikView uses Natural Analytics to reflect the way human curiosity searches and processes information, while delivering the enterprise manageability, governance and service offerings organizations require.

The company’s products helped retailers during the holiday season by providing them with timely and relevant information about inventory and stock, enabling purchasing managers to better anticipate demand and advise production teams.

The Jefferies price target is $39, and consensus target is posted at $33.28. Shares closed on Thursday at $31.16.

VMware

VMware has a 52.4% international exposure and is one of the table-pounding stocks to buy at Jefferies. Back-to-back mediocre earnings releases hit the stock, and the analysts feel it is poised to go much higher from here. The company is still a leader in cloud storage software, and its cloud computing service is a reasonably new offering for their customers.

The company’s vCloud Hybrid Service has not been designed or marketed as a standalone public cloud as of yet. Many Wall Street analysts believe that on a pricing basis it is one of the more expensive offerings. The ability to tie the software solutions in with public cloud service may be a huge winner in the future. Wall Street analysts maintain that if VMware can grow its channel partners to increase the adoption rate of NSX, the company can become more balanced and lessen its dependency on its virtualization business.

Investors can also indirectly own VMware by buying the stock of storage giant EMC Corp. (NYSE: EMC). The company owns over 43 million shares of VMware stock. EMC closed Thursday at $28.72.

The Jefferies price target is an impressive $128, while the consensus target is $101.68. VMware closed Thursday at $84.68.

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While not contrarian, the call by Jefferies to move to companies that have more international exposure makes sense. Investors can have that exposure, but still own companies that are primarily traded here. Most of the stock recommendations are suitable for more aggressive growth accounts.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.