Tag Archives: Analyst Calls

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The Call for Verizon Wireless Consolidation Grows Louder

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By 24/7 Wall St.

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In this morning’s top analyst upgrades and downgrades from 24/7 Wall St. (released each morning), one of the top upgrades was in Verizon Communications Inc. (NYSE: VZ). It was an upgrade from Citigroup that caught our eye but the other side of the coin is that Citi also raised Vodafone Group PLC (NASDAQ: VOD) to Neutral from Sell.

The driving force behind today’s upgrade is not exactly a slate of new phones and it is not that Verizon will out-yield the higher dividend offered by AT&T Inc. (NYSE: T). Today’s upgrade was based upon the hope that Verizon will move to make a leveraged buyout of the rest of the Verizon Wireless division that is partly owned (at 45%) by Vodafone. Even with the added debt, the team expects that a deal would immediately add to earnings and cash flow.

This would be a very complicated deal and it would not be easy to accomplish. The problem is that the value of the unit as a whole might be worth more than $100 billion and Citi feels that this might require a whopping $70 billion or more in debt to be taken upon by Verizon without consideration of other swaps.

We would note that Vodafone recently said that it was open to considerations, and Verizon’s management has also said that they would love to own all of the stake. Our issue is the size of the deal and we think that Citi’s suggestion will add enough leverage that it could jeopardize the dividend. That being said, if Verizon wants to do this deal it better go ahead and do it while interest rates are dirt cheap for corporate borrowing costs. The telecom giant also better try to go out as far on the curve as it can with a long string of laddered maturities so that it can pay that debt off in time.

If you will recall, AT&T recently committed a lot of effort to debt to help fund its expansion and capital spending plans. With rates so low and with the market willing to lend serious money to creditworthy businesses, Verizon might seriously want to consider doing this sooner rather than later if it wants to do it at low borrowing rates.

AT&T now yields about 4.9% versus about a 4.3% dividend yield for Verizon. The difference between these two telecom giants today is that Verizon is literally a couple of cents away from a 52-week high while AT&T is about 6% shy of its 52-week high.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Dividends & Buybacks, Telecom, Telecom & Wireless Tagged: T, VOD, VZ

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Source: FULL ARTICLE at DailyFinance

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Morgan Stanley Raises S&P and Dollar Targets

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By 24/7 Wall St.

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Morgan Stanley (NYSE: MS) has made several changes on its strategy team, with new outlooks in currency and index levels. The big change is in the S&P 500, although it was behind the curve there. Other changes seen were in the U.K. pound and the Japanese yen.

The big change is in the outlook for the S&P 500, which Morgan Stanley lifted to 1,600 over the next year from 1,434 previously offered. That being said, that is with the S&P down by 7.50 to 1,553.25. In short, this was a catch-up strategy call. The firm also raised its S&P earnings per share forecast to $103 from $99 and said that equities have a better risk-reward than credit at the current levels.

The bank expects big changes in the U.K. pound and the yen, which are currently at $1.5117 and 95.025, respectively. The pound sterling, or British pound, could fall to $1.48 from a prior target of $1.62 by the middle of 2013, and it lowered its target to $1.43 from $1.57 by year-end. The bank also raised its dollar target to 105 Japanese yen from 100 yen by year-end, and that is said to be the most aggressive of the money-center projections.

Another call was seen in the U.K. and Japanese stock markets, with Morgan Stanley lifting the FTSE 100 target to 7,000 from 6,500. Note that the index was roughly 6,490 going into that call. The Japan Topix target was raised to 1,270 from 1,200, versus close to 1,100 before today’s drop.

Filed under: 24/7 Wall St. Wire, Active Trader, Analyst Calls, Index, International Markets Tagged: MS

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Source: FULL ARTICLE at DailyFinance

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One Google Analyst on Wall St. Voices Caution as Others Chase Target to $1,000

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By 24/7 Wall St.

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You have seen more than one Wall St. analyst call Google Inc. (NASDAQ: GOOG) with a $1,000 price target, and one more analyst just went up close to that yesterday. Today we have a word of caution from Oppenheimer.

Oppenheimer’s Jason Helfstein has maintained a rating of only Perform (equivalent of Hold or Market Perform). More important is that the price target is $765 for the Internet search giant, and investors and traders will want to focus on the price here as the stock is up around $834 and the consensus price target from Thomson Reuters is $869.10 for Google.

In today’s report Helfstein said:

We believe the Street is ignoring the negative revenue impact of Google’s toolbar policy change, implemented on Feb. 1. While this will be partly offset by the positive impact of Enhanced Campaigns, the latter will not be fully rolled out until June 1. As a result, we see 2013 revenue estimates at risk by 3% or worse, depending on the magnitude of toolbar traffic shifting to other providers. While the long-term impact of Enhanced Campaigns should more than offset lost toolbar/application revenue, we believe near-term revenue estimates are at risk.

By maintaining the share price at $765 rather than chasing it higher, Oppenheimer’s real, unofficial rating could be taken as Underperform because it is implying downside of about 8.2%.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Technology, Technology Companies Tagged: GOOG

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SEC Charges Illinois With Securities Fraud Over Pension Obligations

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By 24/7 Wall St.

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Usually when you see Securities and Exchange Commission charges it is against individuals or firms bilking individuals. That is why today’s round of SEC charges looks more than just interesting. Monday’s news out of the SEC shows that the SEC has now charged the State of Illinois with securities fraud for actions from the period of 2005 to 2009.

The fraud from Illinois was for misleading municipal bond investors about the state’s approach to funding its pension obligations. We figured this was a first, but it is a second. The SEC charged the state New Jersey in 2010 with violating federal securities laws in their public pension disclosures.

An SEC investigation revealed that the State of Illinois failed to inform investors about the impact of problems with its pension funding schedule as the state offered and sold more than $2.2 billion worth of municipal bonds from 2005 to early 2009. The charge said, “Illinois failed to disclose that its statutory plan significantly underfunded the state’s pension obligations and increased the risk to its overall financial condition. The state also misled investors about the effect of changes to its statutory plan.”

The SEC also shows that Illinois has settled the charges and has implemented a number of remedial actions and issued corrective disclosures as far back as 2009.

As far as why this matters, let’s just call it a ratings agency issue. It was just in December of 2012 that Moody’s revised the State of Illinois’ rating outlook to negative from stable and showed that its general obligation rating was affirmed at “A2.” Then late in January of 2013 came word that S&P lowered the State of Illinois rating down one notch to “A-” ahead of a bond sale due to rising pension costs.

Filed under: 24/7 Wall St. Wire, Accounting, Analyst Calls, Banking & Finance, Bonds, Personal Finance, Politics

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Source: FULL ARTICLE at DailyFinance

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Another Huge Price Target Boost for Google

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By 24/7 Wall St.

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The Internet analyst folly on Wall St. continues. On Monday came yet another higher price target for Google Inc. (NASDAQ: GOOG) as RBC Capital Markets has raised the Google stock price target objective to $950 per share from a prior $840 price target, based on higher earnings growth over the next three-year period.

Also cited were cost-per-click trends, improving trends in the international segment and a real monetization of YouTube. RBC even called Google one of its best ideas from the research team. While RBC has just maintained an Outperform rating, it is not as high as prior price targets.

It was just on February 21 that both Bernstein and CLSA raised their respective Google share price targets up to $1,000. Bernstein previously had been at $820 and CLSA at $900. That being said, this new jump to $950 from $840 sounds high, but relatively speaking it is not as bold nor as wide as it seems.

The closing price before the prior two $1,000 analyst calls was $792.46 for Google stock. Friday’s closing price was $831.52, and the highest close last week was $838.60. Google shares are up more than $7 at $838.55 this morning on the news. Maybe the curse of the $1,000 stock is not as big of jinx as it might seem.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Technology, Technology Companies Tagged: GOOG

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BofA/Merrill Lynch Cautions on Software Valuations with Downgrades

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By 24/7 Wall St.

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In this morning’s top analyst upgrades and downgrades feature, which we run each morning, Bank of America/Merrill Lynch downgraded both Adobe Systems Inc. (NASDAQ: ADBE) and Intuit (NASDAQ: INTU) in the server and enterprise software segment. What is interesting is that both downgrades are not just on valuation. They include higher price targets on the two stocks.

As far as Adobe Systems Inc. (NASDAQ: ADBE), this was cut to Neutral from Buy, but the price target was raised to $45 from $40. BofA’s Kash Rangan said that its transition of the creative business to a subscription model is playing out and as it has approached the target price.

The Adobe report said:

We continue to see Adobe as a leading provider of Creative tools and are equally impressed by the evolution and growth prospects of Digital marketing business. However, the stock at ~$42 leaves limited room for upside in our opinion and our price objective goes to $45 from $40… Longer term, as HTML5 gains adoption, we see Adobe as well positioned with tools like Edge and Muse, and its PhoneGap acquisition to support cross-platform content creation.

Intuit Inc. (NASDAQ: INTU) was cut to Neutral from Buy, but its stock price target was raised to $71 from $65. The firm supports management and the ability to execute, although the stock is up 180% over the past four years, and it is said to be baking in a solid tax season already.

On Intuit, BofA noted positive trends for H&R Block Inc. (NYSE: HRB). It said:

Latest tax data from H&R Block indicated it grew faster than INTU in February, and if this trend persists through the season, it may risk INTU‘s tax units’ goal. However, we think it is still early and Intuit is likely to make up for any share losses later.

Intuit’s stock has fallen further on this downgrade and is down by 2.2% at $66.26, against a 52-week range of $53.38 to $68.41. Adobe’s stock price is down 0.6%, at $41.25 against a 52-week range of $29.52 to $41.91.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Software, Technology, Technology Companies Tagged: ADBE, HRB, INTU

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Solar Stocks Get a Jolt (TSL, STP, SPWR, FSLR)

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By 24/7 Wall St.

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Analysts at Raymond James raised their ratings on several solar stocks, saying that the risk of owning these stocks is now in balance with the potential reward. The four stocks included in the upgrade from Underperform to Market Perform are Trina Solar Ltd. (NYSE: TSL), Suntech Power Holdings Co. Ltd. (NYSE: STP), SunPower Corp. (NASDAQ: SPWR) and First Solar Inc. (NASDAQ: FSLR).

These stocks have had a decent bounce since the beginning of the year, with SunPower getting the biggest jolt, up more than 138% at its peak in mid-February. Since then, shares have pulled back to a still-respectable year-to-date gain of 121%.

First Solar peaked in at the same time, up about 17% and has since moved steadily down to a year-to-date loss of more than 13%.

Trina Solar peaked in early January, up about 34%, and has trailed downward ever since to lose of about 3%.

And Suntech also peaked in early January, up about 22% and now down about 22%. Suntech has some unique problems, which we covered earlier today.

All except Trina Solar are already trading above their consensus price targets, even with the steep declines since the first of the year. None is a buy-and-hold candidate.

Filed under: 24/7 Wall St. Wire, Alternative Energy, Analyst Calls, Green Biz, Technology Companies Tagged: FSLR, SPWR, STP, TSL

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Source: FULL ARTICLE at DailyFinance

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Cramer and Analysts Further Talk Up Radian and MGIC

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By 24/7 Wall St.

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Radian Group Inc. (NYSE: RDN) has been on fire and shares are ticking up yet again on Tuesday. It has risen for eight consecutive trading days, and if Tuesday’s preliminary gains can hold then it could be Radian’s ninth consecutive trading day with gains.

On Tuesday morning we saw that Barclays raised the ratings to Overweight from Underweight on both Radian and on MGIC Investment Corp. (NYSE: MTG). MGIC‘s price target was raised to $8 from $1, and Radian’s price target was raised to $14 from $4 for the stock.

Radian was also raised to Outperform from Market Perform at Keefe Bruyette and Woods just on Monday.

MGIC shares have risen for five consecutive trading days, and this will be a sixth consecutive day of gains if it holds.

Market pundit and TV personality Jim Cramer just said on CNBC that there may be a mortgage settlement coming the way of Radian and that it could be worth another $4 alone to the stock price.

Radian shares are up 8% to $10.69, a new 52-week high ($10.04 prior high). MGIC is up 15% to $4.82, and its 52-week high is $5.15.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Banking & Finance, Housing Tagged: MTG, RDN

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Analysts Remain Very Bullish on MLPs (EVEP, MEMP, LGCY, BBEP, KYN, SRV, CS, BAC)

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By 24/7 Wall St.

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The MLP research team at Credit Suisse Group (NYSE: CS) are still firm believers in their “catch-up” rally slogan. Master limited partnerships (MLPs) underperformed the S&P 500 in 2012 for the first time since 1999, with the Alerian MLP Index (AMZX) gaining 4.8% versus 16.1% for the broader market. MLPs have made up ground thus far in 2013 and look to continue their solid progress. In a report issued today, Credit Suisse upgraded one MLP, and we also highlight other favorite MLP stocks to buy.

EV Energy Partners L.P. (NASDAQ: EVEP) gets the nod today as it is raised to Outperform from Neutral. The Credit Suisse team also raises their price target to $57.50 from $52.50. This is way below a very aggressive Wall St. consensus price target of $68. The current yearly distribution is $3.07 per year, for a 5.90% yield. MLP distributions often include return of principal.

The MLP analysts at Bank of America Corp. (NYSE: BAC) also have joined the growing chorus of those suggesting MLP stocks for their customers seeking solid, dependable income streams. In a recent research piece, the analysts pointed out that MLPs are attractive from an income and growth perspective, providing investors yield and return potential. They were positive on higher yielding MLP names. Here are three of them.

Memorial Production Partners L.P. (NASDAQ: MEMP) is a Houston-based MLP that has one of the highest distributions currently available. Paying $2.03 per unit, that translates to a 11.00% yield. The Thomson/First Call consensus price target is $21.50.

Based in west Texas, with properties in the Permian Basin, Mid Continent and the Rocky Mountain regions, Legacy Reserves L.P. (NASDAQ: LGCY) is another top Bank of America MLP pick. With a solid 8.60% distribution to unit holders, it has a consensus price target of $31.

Breitburn Energy Partners L.P. (NASDAQ: BBEP) another high yielding name, is a West Coast-based MLP that pays unit holders $1.88 per year, which equals a 9.80% yield. The consensus price target is $22.

As we have pointed out before, the advantage to owning MLPs in an investor portfolio is that they often present one of the best total return opportunities. These three high-yielding individual names could offer just that. Investors seeking diversification in the space may also want to look at the Kayne Anderson MLP Investment Co. (NYSE: KYN) or the more aggressive Cushing MLP Total Return Fund (NYSE: SRV). Both are exchange traded funds (ETFs) that offer a basket of MLPs.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Oil & Gas Tagged: BAC, BBEP, CS, EVEP, KYN, LGCY, MEMP, SRV

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Eleven Stocks Expected to Rise by 50% to 100% — or More

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By 24/7 Wall St.

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Investors are always looking for new ideas. Now that the Dow Jones Industrial Average is trying to hit new highs and investors are pouring record inflows of capital into stocks, investors should remember that stocks basically have doubled from their lows in the recession. Analysts on Wall St. make routine calls that are the equivalent of Buy, Sell or Hold. Some of the calls come with great risk, and some come with great rewards to those analysts who are insightful enough to make strong calls that come true.

24/7 Wall St. has gone through a recent batch of analyst calls looking for those stocks that imply upside of 50% or more. We compiled a list of recent calls and recent developments where analysts expect certain stocks to rise by about 50% or much more. In this analysis we have shown the calls and compared them to consensus price targets from Thomson Reuters‘ pool of analysts. We have also added color on these if applicable.

The list of potential 50% upside stocks includes the following companies: Apple Inc. (NASDAQ: AAPL), Barrick Gold Corp. (NYSE: ABX), Forestar Group Inc. (NYSE: FOR), GNC Holdings Inc. (NYSE: GNC), Nanosphere Inc. (NASDAQ: NSPH), Nokia Corp. (NYSE: NOK), Oncolytics Biotech Inc. (NASDAQ: ONCY), Peabody Energy Corp. (NYSE: BTU), Penn Virginia Corp. (NYSE: PVA), Sequenom Inc. (NASDAQ: SQNM) and VIVUS Inc. (NASDAQ: VVUS).

It was just back on January 4, 2013, when the year was getting underway that we covered 12 other stocks that analysts expected would rise 50% to 100%, or even more. None of these stocks overlap due to 60 days having passed. More of those stocks are up than down, but we would show the risk versus reward here. One is up 62% and one is up 85% since that first list, but one stock is down 68% since then.

Investors always look for stocks to buy that can bring rewards. We would point out that most of these companies are not exactly considered your stable blue chip stocks you might find in the Dow Jones Industrial Average. Another observation is that most do not pay dividends.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Value Investing Tagged: AAPL, ABX, BTU, FOR, GNC, NOK, NSPH, ONCY, PVA, SQNM, VVUS

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Source: FULL ARTICLE at DailyFinance

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Chip and Infratructure Winners Steal Thunder at 2013 Mobile World Congress (SNE, INTC, BRCM, AMD, MRVL, FBRC)

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By 24/7 Wall St.

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Typically the Mobile World Congress exposition focuses on the smartphone and handset part of the industry, and at this years recently completed show in Barcelona that was once again the case. While there were not a tremendous number of new device launches, new smartphones from LG, HTC and Sony Corp. (NYSE: SNE) made a splash. But in a note today from FBR & Co. (NASDAQ: FBRC), it was less about handsets, and more about infrastructure.

The research team at FBR Capital Markets notes that, surprisingly, the most meaningful announcements at Mobile World Congress 2013 were not handset-driven but rather emphasized the changes in data centers, delivery and infrastructure needed to enable next-generation handset service. The most significant takeaways from the meeting reinforce the idea that they are on the brink of a large-scale shift in data center architecture, and while not yet fully defined, this holds significant implications for chip companies.

The mobile ecosystem is expanding at lightning speed, with endless innovation and new applications of mobile technology. From contactless payments and augmented reality to embedded devices and connected cities, mobile technology is changing the landscape. The impact mobile will have on the world is limitless. The explosive growth of at-your-fingertips data has driven the need for data centers to change some of their basic infrastructure. According to the FBR team, this can have big implications for semiconductor companies.

Their report lists four semiconductor companies that may benefit from the change in data center architecture as companies strive to have the processing power to accommodate huge advances in technology.

Intel Corp. (NASDAQ: INTC), the leader in personal computing and laptop processors, is working to add new products that target the smartphone and tablet industry. The Thomson/First Call consensus price target for Intel is $23.

Troubled industry laggard Advanced Micro Devices Inc. (NYSE: AMD) has promising new low-power, low-cost semiconductors that may prove competitive. The stock has taken a beating over the years and trades at just $2.41 today. The Wall St. consensus estimate is $3.

Broadcom Corp. (NASDAQ: BRCM), which specializes in semiconductor solutions for wired and wireless communications, may have the most potential upside. The company operates in three segments: Broadband Communications, Mobile and Wireless, and Infrastructure and Networking. Its ability to offer solution for multiple segments of the industry may help sustain its heady growth prospects. The consensus price target is $40.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is a big favorite of hedge fund manager David Einhorn, who has almost 6% of his total portfolio in the name. The company also may benefit from data center growth. The consensus price target is $15, which would represent almost a 50% move from today’s price of $10.12.

The inevitable growth of the wireless industry means that semiconductor companies will have to keep up their research and development expenditures to compete in a challenging and changing environment. The companies with the deepest pockets for R&D may prove to be the biggest winners.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Technology, Technology Companies, …read more
Source: FULL ARTICLE at DailyFinance

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Applied Materials Scores Conviction Buy List Spot From Goldman Sachs Analyst

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By 24/7 Wall St.

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Applied Materials Inc. (NASDAQ: AMAT) may be looking at a new Chief Financial Officer, but one Wall Street bulge bracket firm has no concern here whatsoever. Applied’s shares have risen with the market today. What stands out is a research call where Goldman Sachs has raised the “Buy” rating classification. Applied Materials is now being added to the widely followed and highly prized Conviction Buy List at the firm.

Today’s call was an intraday call and that often garners more interest than if it is in the myriad of the morning analyst calls which take place each day between the prior day’s close and before the stock market open. The firm is touting it is a positive that naming Bob Halliday as CFO is a real positive move for Applied Materials. It is rare to see a CFO replacement being cited as a reason for such an upgrade.

Goldman Sachs believes that Halliday will be able to continue with his goal-setting and with cost containment efforts that he had at Varian Semiconductor which ultimately helped it score a significant buyout premium by Applied. The move also comes when Applied Materials is already much closer to its 52-week highs.

When we see a call of this magnitude it is hard to not recall what we deem as perhaps the most bullish semiconductor analyst call so far in 2013. In mid-January, Credit Suisse called what it saw as an “Irresistible Cyclical Bottom in Semiconductors.” That call was actually on real chip-makers rather than on the CapEx side of the chip business but it is hard to have an explosive growth in one sector without any gains in the other. Still, shares of Applied Materials were trading at only $11.63 when that call was made.

After a 2.3% gain on Tuesday, Applied Materials shares are higher by 2.3% at $13.55 against a 52-week range of $9.95 to $13.99. The company’s market capitalization is $16.25 billion and the consensus price target on the stock is $14.38 according to Thomson Reuters.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Semiconductor, Semiconductors, Technology, Technology Companies Tagged: AMAT

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Analysts with $1,000 Google Calls — Perhaps a Jinx

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By 24/7 Wall St.

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Wall St. analysts take a beating sometimes, and they are praised at other times. The lessons of the endless chasing of Apple Inc. (NASDAQ: AAPL) with higher and higher analyst price targets and sales figures came with a big price. The stock got way overbought as a result. Now with Google Inc. (NASDAQ: GOOG) crossing above $800 for the first time ever, and with two calls going up to $1,000 for a price target, we cannot help but wonder if this is some of the same Wall St. mojo happening here.

We have seen two serious Google upside calls in the past 24 hours. Bernstein raised its price target to $1,000 from $820, while CLSA lifted its price target to $1,000 from $900. The long and short of the matter is that Wall St. was far too negative and far too cautious on the trends impacting ad sales for Google and many other key online properties.

Our issue is that when you see one major hurdle crossed, and then a series of new higher hurdles and higher projections being made, it can signal a top. That might not be a long-term top, but how many days in a row can something rise indefinitely.

Also note that Jim Cramer touted a $1,000 target for Google briefly back in 2007, before the Great Recession wiped off the map that and every other bullish prediction on anything and everything. Before you read too much into that prior $1,000 note, it was a reference more than it was a dire prediction.

Another consideration is that when upside calls get too aggressive, they can be reckless. Last year when Priceline.com Inc. (NASDAQ: PCLN) was in the race to $1,000 with Google and Apple, the caveat was that when you read “pom-pom” articles that sound like a cheer leading squad, it may not signal the end of a run. It does, however, signal that the easy money already has been made.

One more caveat. Google is one of the companies in which shareholders have NO power whatsoever. And nonexecutive chairman (and ex-CEO) Eric Schmidt has made a move to unload about half of his Google holdings.

Google shares are up in mid-Thursday trading by $31.40 to $795.60, against a 52-week range of $556.52 to $808.97. Its market cap is now about $262 billion, and it trades at what Wall St. expects will be about 17.5 times the expected 2013 consensus earnings estimate from Thomson Reuters. The consensus estimate is $831.43.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Technology, Technology Companies Tagged: AAPL, GOOG, PCLN

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Oppenheimer Sees Bullish Spending Trends for Enterprise Software Stocks (CALD, CRM, DWRE, LPSN, ORCL)

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By 24/7 Wall St.

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We have heard it on Wall St., in Las Vegas, even in the movies: “show me the money.” There is a good reason why. Corporate spending is the fuel that drives profits, and strong profits drive higher stock prices. Oppenheimer recently surveyed 35 mostly domestic enterprise (about $2.6 billion in annual sales) chief information officers, vice presidents and managers with information technology (IT) purchase decision-making authority for their companies to gauge new SaaS/applications software spending trends and enterprise information technology priorities. Their interpretation of the results point to a very constructive spending environment.

The analysts at Oppenheimer believe their survey results show that bullish corporate spending intentions and top priorities for big data analytics and marketing technologies cannot be ignored. They suggest that a momentous wealth creation opportunity exists for the most innovative marketing software suppliers with a product suite vision. By crunching the data, and looking into the enterprise software universe, five stocks look to benefit from the increase in corporate spending.

California-based Callidus Software Inc. (NASDAQ: CALD) offers CallidusCloud Sales Selector solution, which delivers online video interviewing, assessment testing and social benchmarking. This could be a top percentage winner for investors. The Oppenheimer price target is $7, almost 50% higher than yesterday’s $4.75 close. The Thomson/First Call estimate is also at $7.

Customer relationship management leader Salesforce.com Inc (NYSE: CRM) makes the list and has a 12 to 18 month price target of $200. That is above the Wall St. consensus of $190.

Demandware Inc. (NYSE: DWRE) helps its customers build, manage and implement websites, mobile applications and digital storefronts. The Oppenheimer price target is $35. The consensus estimate is $36.

LivePerson Inc. (NASDAQ: LPSN) trades at the deepest discount to its rivals. By connecting business with customers through a variety of options, LivePerson is showing faster organic growth and profitability than its competition. The price target is $16. The consensus is higher at $16.50.

Industry giant Oracle Corp. (NASDAQ: ORCL) rounds out the top names. This software and hardware leader never seems to generate the respect it deserves on Wall St. and Oppenheimer agrees. Its price target is $37, while the consensus price target is $38.

One thing was clear in the Oppenheimer research report. Corporate America is utilizing every software advantage and advance to enhance, enlarge and engage customers. With current technology and trends moving at breakneck speeds, companies cannot be outspent by their competition and hope to succeed.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Software, Technology, Technology Companies Tagged: CALD, CRM, DWRE, LPSN, ORCL

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Source: FULL ARTICLE at DailyFinance

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Slew of Analyst Upgrades Driving Chip Stocks (ALTR, ATML, CY, ONN, XLNX)

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By 24/7 Wall St.

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It was not that long ago that we saw a research report from Credit Suisse calling the chip sector at an “irresistible cyclical bottom.” Now we have a slew of analyst reports driving shares higher in the semiconductor sector on Tuesday. Chip stocks are responding well, as you will see.

Altera Corp. (NASDAQ: ALTR) was reiterated with a Buy rating and the price target was raised by $4 to $42, based on demand recovery and the possibility of a higher dividend. Shares are up 1.8% at $36.39, against a 52-week range of $29.59 to $40.31.

Atmel Corp. (NASDAQ: ATML) was raised to Buy from Hold at Needham with a price target of $10 on the stock. Shares are up 1.8% at $7.30, against a 52-week range of $4.37 to $10.73.

Cypress Semiconductor Corp. (NASDAQ: CY) was raised to Buy from Hold by Needham, and the price target is $13.00 per share. The upgrade is based in part on valuation and in part due to improving conditions in the SRAM chip market. Shares of Cypress are up 5% at $10.35, against a 52-week range of $8.70 to $18.70.

ON Semiconductor Corp. (NASDAQ: ONNN) was reiterated as Buy at Canaccord Genuity with a $10 price target. The firm is increasing estimates on an improved target model from analysts’ day, with higher gross and operating margin targets versus the prior model, leading to higher earnings estimates. Upside to revenue may be driven by strength for handsets and autos, followed by improving industrial and white goods demand. Shares are up 1.4% at $8.57, against a 52-week range of $5.70 to $9.44.

Xilinx Inc. (NASDAQ: XLNX) is surging after Bank of America/Merrill Lynch raised its price target by $7 to $45 per share and raised the rating to Buy from Hold. The upgrade is driven by the 4G LTE wireless build out, IP broadband, data center upgrades and improving industrial demand.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Semiconductor, Semiconductors, Technology, Technology Companies Tagged: ALTR, ATML, CY, ONNN, XLNX

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Using Black Swan and Antifragile Analysis for Tech Stocks (UBS, VMW, CRM, AAPL, FB, LNKD, HPQ, NTAP, FIO, IBM, EMC)

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By 24/7 Wall St.

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Nassim Taleb is well known for his work as a trader and professor, as well as the author of the book ” Black Swan.” He often concentrates his work on market volatility and the likelihood of extreme situations or occurrences that can radically move stock prices. The 9-11 attacks on the World Trade Center were a black swan event, devastating and totally unpredicted. His new book “Antifragile” focuses on things that gain from disorder. Are there tech stocks that can gain from disorder as well?

The tech analysts at UBS A.G. (NYSE: UBS) decided it would be interesting to apply some of the principles of Taleb’s book to tech stocks they cover. They point out in their report released today that Taleb advises using optionality to your advantage in finding situations with limited downside but undetermined upside. What matters is not the frequency of being right but the magnitude when you are correct. Also, to favor a barbell approach, both in specific companies that avoid the mushy middle of markets and in your portfolio by mixing low and high-risk assets.

Fragile things hate volatility and uncertainty, while the antifragile thrives on it. The UBS team believes that technology stocks, especially large caps, are inherently fragile, given that the industry structure changes every 15 years or so. They looked for companies riding emerging trends, and point to VMware Inc. (NYSE: VMW) and Salesforce.com Inc. (NYSE: CRM) as examples.

Vendors creating new product categories also scored high as antifragile. This category included names like tech giant Apple Inc. (NASDAQ: AAPL), social media leader Facebook Inc. (NASDAQ: FB) and business networking site operator LinkedIn Corp. (NYSE: LNKD).

One area that the spectrum of fragility did not favor as well was information technology (IT). The UBS analysts pointed out that computing as a service may present more risk than upside for many of the names that they cover. In their coverage universe, they consider Hewlett-Packard Co. (NYSE: HPQ) particularly fragile, given its size and share losses. They also see NetApp Inc. (NASDAQ: NTAP) as caught in the middle as it remains concerned about Fusion-io Inc.’s (NYSE: FIO) niche status. However, International Business Machines Corp. (NYSE: IBM) and EMC Corp. (NYSE: EMC) scored much better and are well-positioned large vendors.

At the end of the day, technology in always changing and evolving. Companies that look to past successes and not to future growth often can find themselves in the stock graveyard. Antifragile tech stocks might be the way to protect a portfolio from rapid technology and consumer shifts.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Technology, Technology Companies, Telecom & Wireless Tagged: AAPL, CRM, EMC, FB, FIO, HPQ, IBM, LNKD, NTAP, UBS, VMW

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Is Groupon Really a "Buy"???

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By 24/7 Wall St.

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Groupon, Inc. (NASDAQ: GRPN) is a troubled company under questionable leadership where IPO investors have been crushed. Long gone are the days of a $6 billion o $7 billion buyout offer from Google Inc. (NASDAQ: GOOG) back before this IPO. Groupon was raised to “Buy” from “Neutral” bt Stern Agee on Wednesday. We cannot help but wonder if this is really a long-term buy or whether this is just a chance to get out again at a higher price.

For starters, Stern Agee‘s Arvind Bhatia specifically said in the upgrade that this is not endorsement of a quarterly earnings report. His call is based upon the daily deals business is evolving  via a more constructive long-term view. The upgrade was based upon turning the international strategy around and leveraging its mobile efforts. The main assumption here is that Groupon can emerge beyond a push company that sends deals out to a model where consumers can start searching for more current deals. Bhatia thinks that Groupon’s share price can rise to $9.00.

The latter point here is one that has been a serious issue for Groupon. It used to be that you went to Groupon’s site and had to submit your email address if you were not logging in. Now it is more and more like the way that Living Social has been presenting its daily deals. Our take is that the Stern Agee upgrade is making this Groupon story one where consumers can directly go search for their deal. This is the evolution of the daily deal model into the “ongoing deal” category.

While what Stern Agee lists this as a turn right direction, we still have concerns that there are just no barriers to entry at all. Valuation is a concern as well as shares have now more than doubled off their 52-week low.

After a gain of 5.6% to $5.59 so far on Wednesday, the 52-week range is $2.60 to $20.63. As a reminder, Groupon’s IPO price was $20.00 per share.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Consumer Goods, Consumer Product, Internet, Retail Tagged: GOOG, GRPN

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2 Facebook Analyst Downgrades, Bleeding Over To LinkedIn

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By 24/7 Wall St.

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Facebook, Inc. (NASDAQ: FB) has had a very tough time attractive investors since its recent earnings report failed to continue to drive interest. It should be no surprise that the stock cooled off after having risen back up more than 11% ahead of earnings to above $31 versus $28.00 at the end of 2012.

Now we have two more analyst downgrades adding pressure to Facebook shares. What is interesting is not just the 2.8% drop this Tuesday. What is interesting is that the shares broke under the 2012 close out price of $28.00 and are now trading down around $27.50 in normal trading volume.

Facebook shares were downgraded to Market Perform from Outperform at Bernstein. Then another firm named BTIG downgraded the social media giant from an already-cautious Neutral rating down to a “Sell” rating due to slowing user engagement trends. It was just recently, yet still after earnings, that Barron’s drilled Facebook. When the stock was still above $30, Barron’s said that perhaps it was far too bearish when the publication said that Facebook is not really worth a peak of $15.00 for its stock. It said that it should now just be worth no more than $25.00 per share.

Not all social media players are equal. LinkedIn Corporation (NYSE: LNKD) just hit an all-time on Friday and Monday and now shares are around $155 after taking a very small breather. LinkedIn is worth some $16.7 billion, while Facebook is worth some $65 billion or so.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Media, Technology, Technology Companies Tagged: FB, LNKD

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Dell Likely To Be Cut To Junk-Bond Credit Rating After Buyout

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Stock Split ImageDell Inc. (NASDAQ: DELL) is trading up only about 1% now that its formal buyout has surfaced. Now that Michael Dell is using private equity as an investor and using finance from the outside and repatriating cash from overseas, not everyone is positive on this deal.

We warned about shareholder suits or investigations announced by law firms because this was going to lock in forced long-term losses for many shareholders. Now we have some new concerns brought up by Standard & Poor’s on Dell’s corporate credit rating.

S&P placed Dell’s “A-” rated corporate credit rating and its “A-1″ commercial paper ratings on CreditWatch with negative implications. In short, S&P is considering a downgrade of the corporate credit. This comes on the heels of seeing some Dow Jones news this morning showing that credit spreads widened out on Dell’s longer-term corporate bonds. That report noted that prior debt holders may be subordinate to the new debt for this MBO financing.

Michael Dell may be getting to do this deal solely because interest rates are so low. Otherwise the borrowing costs are likely to be higher down the road. The problem is that S&P said that it expects to lower its ratings on Dell out of investment grade after reviewing the proposed capital structure, corporate financial policy, and strategic direction under the new ownership structure.

As this new borrowing will leverage Dell’s good balance with a lot of new debt, S&P warned that the new credit rating is likely to be no more than “BB” and perhaps in the “B” range. In short, Dell’s existing debt will likely be junk-rated debt. This sounds bad on the surface and in no way is it really good. The caveat we would bring up is that this would not be anywhere close to the first instance that this has come about where good credit is cut to junk-rating. That was very common back in the private equity boom from 2005 to 2008 when companies were acquired almost weekly with leveraged finance by private equity shops which hoped to flip the companies back on to the capital markets or to a higher bidder down the road.

Michael Dell‘s press release this morning indicated that the deal is not subject to any financing. For his sake he better hope that doesn’t magically change.

Dell shares are up 1.2% at $13.43 against a 52-week trading range of $8.69 to $18.36.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Bonds, Mergers & Acquisitions, Mergers and Buy Outs, PC Companies, Private Equity, Technology, Technology Companies Tagged: DELL

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After Drop in 2012 Semiconductor Sales, 2013 Looks Much Brighter (ARMH, INTC, AAPL, MU, SNDK, AMAT)

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94073253Despite an explosion in smartphone and tablet sales in 2012, overall semiconductor sales were down for the year. The three-month average for global chip sales was $24.74 billion in December, down 3% from a revised November figure of $25.51 billion, according to the Semiconductor Industry Association. Is this a trend that will continue into 2013 or is there reason to be more positive on the industry?

Global chip sales for 2012 reached $291.6 billion, a decrease of 2.7% from $299.5 billion in 2011. Total sales for the year were slightly above the $290 billion predicted by the World Semiconductor Trade Statistics (WSTS) organization in November. WSTS forecasts the global chip market will grow by 4.5% in 2013.

ARM Holdings PLC (NASDAQ: ARMH) reported earnings that rose 19.2% year-over-year to GBP164.2 million, versus the GBP151.4 million consensus. ARM enters 2013 with a robust opportunity pipeline for licensing and a record order backlog. Market share gains in long-term growth sectors look set to continue as their partners introduce new chips based on ARM technology. While analysts have recently downgraded the stock on valuation, any significant dip in the stock price may offer investors an excellent entry point.

Intel Corp. (NASDAQ: INTC) reported adjusted earnings $0.51 per share ($0.48 per share net) and $13.5 billion in sales. Thomson Reuters had estimates of $0.45 per share and $13.53 billion in sales. For the coming quarter, Intel sees revenues of $12.7 billion, with its usual plus-or-minus $500 range on it. Thomson Reuters has the coming quarterly earnings report showing a consensus of about $12.9 billion in revenue. The company is trying to end its dependence on the personal computer market to focus on the smartphone and tablet arena. With a very nice 4.25% dividend, investors can be patient with the chip giant.

In a very competitive environment, memory chip maker Micron Technology Inc. (NASDAQ: MU) may have the ability to surprise when they report in March. Long a victim of stubbornly low and competitive pricing in the industry, memory chip prices have jumped recently and may continue higher. With a forward price-to-earnings (P/E) ratio of 15.30, analysts are expecting earnings per share to be up 193% next year, and the stock is trading for slightly over book value and under one times sales. Plus insider ownership has increased by 45% over the past six months.

Another name with a potential for a bright 2013 is SanDisk Corp. (NASDAQ: SNDK), which designs, develops and manufactures NAND flash memory storage solutions that are used in various consumer electronics products. SanDisk chips are found in the Apple Inc. (NASDAQ: AAPL) iPhone 5. Smartphone makers pay up for flash, at least compared with other types of semiconductors. At $21, the SanDisk chip is the second-most-expensive component in a 32 gigabit (GB) iPhone 5, according to research firm IHS iSuppli. Only the touchscreen display costs more. SanDisk is the biggest pure-play maker of flash memory. Two weeks ago, Rajvindra Gill, an analyst for Needham, upgraded the stock to Buy from Hold. He has a price target of $60 but sees the possibility of a $65-to-$70 stock. He points out that gross margins were 40% in the fourth quarter, compared with an expected 33%, and says, “We expect margins to improve throughout the year. And when you flow that through the model, you get a tremendous amount of earnings.” In a bullish scenario, per-share earnings could reach $5 next year, Gill says, nearly a dollar above the current consensus.

One other area to always look at when gauging the growth and health of the semiconductor industry is the actual manufacturing of the chips. Applied Materials Inc. (NASDAQ: AMAT) provides manufacturing equipment, services and software to the semiconductor, flat panel display, solar photovoltaic and related industries worldwide. Like Intel, Applied Materials is an industry leader, and also pays a solid 2.76% dividend. While analysts are only expecting $0.03 in earnings for the quarter that ended in January, revenues are expected to jump from $7.58 billion this year to $9.13 billion next year, a 20% increase. Applied Materials actually may prove to be a very solid value play.

With 2012 behind the industry and growth for 2013 expected to be close to 5%, it just makes sense for investors to look at quality names in the semiconductor sector that can benefit from improving economies and a healthier consumer climate.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Semiconductor, Technology, Technology Companies Tagged: AAPL, AMAT, ARMH, INTC, MU, SNDK

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