VIEWS: 12 PAGES: 3 CATEGORY: Stocks and Bonds POSTED ON: 4/2/2014
A rundown of what went on today in the tech-stock sector
A rundown of what went on today in the tech-stock sector
Robert DeFrancesco’s Tech-Stock Prospector April 2, 2014 TSP Tech Stock Overview & Analysis—April 2, 2014 UPDATE | 4:56 PM ET--This was an interesting day because most of the momentum names rolled over after yesterday’s big rebound, indicating underlying weakness remains across this group. For example, Splunk (SPLK, $71.12--2014 TSP Tech Disruptor) declined 5% on active volume and took out its recent low, trading down to $70.27, while Yelp (YELP, $75.63--TSP Watch List) dipped 5.6% (although it remains above its recent low of $74.25). The momentum names need to begin a period of consolidation or we could be headed for another downward leg. Here is a sampling of some tech RSIs (ranked highest to lowest): *CRM—47.5 *TRIP—45.9 *NOW—43.9 *NMBL—42.3 *WDAY—40.8 *DATA—38.7 *CNQR—38.1 *FEYE—37.9 *N—35.8 *YELP—34.8 *SPLK—34.4 *IMPV—34.1 *ULTI—28.2 Piper Jaffray upgrades Intel (INTC, $25.89) to ‘Overweight’ with a price target of $30. The firm looks for the PC market to continue to stabilize and believes Intel is positioned over the longer term to benefit from datacenter market growth. UPDATE | 1:22 PM ET--On the TSP Watch List, Workday (WDAY, $93.02) shares today reversed after rallying to a high of $96.49, just below the 50-day moving average of $96.86. The stock needs to begin to consolidate, and hold the recent low of $89.65 (March 26) in the process. UPDATE | 12:22 PM ET--The momentum names today are taking a break after yesterday’s run. SPLK, YELP, DATA and NMBL down the most, while NOW and TRIP are holding up relatively well. UPDATE | 11:04 AM ET--UBS ups its Marvell Technology (MRVL, $16.26) price target to $17 from $14 on rising 4G LTE demand worldwide. Yesterday, MKM Partners said it believes the concerns about competition that Marvell faces from Qualcomm (QCOM) and Mediatek in China 4G are overdone. Also yesterday, Brean Capital said it sees Marvell (during the appeals process) winning a significant reduction of the $1.54-billion patent infringement damages awarded to Carnegie Mellon. The firm maintains its price target of $19. UPDATE | 10:23 AM ET--Bernstein Research thinks Google (GOOG, $1,129.75) shares are undervalued at current levels and that the valuation could rise significantly because of what it calls the company’s “world-leading capabilities.” The firm predicts Google Play, Compute and App Engine, as well as Apps for Business and Apps for Government, will all become multi-billion dollar units. Bernstein maintains its price target of $1,500. UPDATE | 9:15 AM ET--Wells Fargo upgrades Fortinet (FTNT, $22.70) to ‘Outperform’ with a valuation range of $27 to $30 (up from $23 to $25 previously) based on the potential for an improved refresh cycle and a better spending environment in network security to drive upside to 2014 revenue and billings estimates. The firm says Fortinet has relatively easy comps for 1H’14. In the near term, Wells Fargo sees opportunity in the SMB segment, and longer term sees Fortinet’s positioning improving in the high end/carrier segment. The firm says its 2014 billings growth forecast of 14.6% could prove to be conservative. With operating margin targets reset at the Q4 earnings call, the firm thinks the stock has been somewhat de-risked. Along these lines, Street estimates reflect higher S&M costs/lower margins, but do not show a meaningful improvement in revenue growth in 2014 compared to last year. Also, the firm says Fortinet shares have underperformed security peers by about 45% over the last year and could be due for some reversion as growth improves. ------------------------------------------------------------------------------------------------------------ Download the March 2014 issue of Tech-Stock Prospector to your Amazon Kindle or Kindle for iPad/iPhone reading app here: http://www.amzn.com/B004T6Z0ME Here are some of the topics covered in the March 2014 issue: *Favorite stocks of the momentum crowd *3 winning IT security plays *How Yelp helps local businesses *Big Data Watch: Splunk well positioned for growth *Salesforce ramps up an impressive backlog *Cloud-software leader Workday builds out its portfolio *Data Visualization: Why some smart investors like Tableau Software *Qlik Technologies gears up for a major new product launch *Insights from the big Morgan Stanley tech conference *The new 802.11ac WiFi standard gains momentum *5 growth drivers at Aruba Networks *Infoblox plots its rebound after the recent stumble *Electronic Arts benefiting from the new videogame console cycle *Security Focus: Fortinet ready to gain market share in the enterprise *Is Riverbed Technology in play after rejecting Elliott’s buyout offer? *Nimble Storage brings its hybrid platform to the enterprise *Could Yahoo shares get a boost from an Alibaba IPO filing? *Palo Alto Networks shares surge on positive IP litigation news *Deal Report: IPOs from Varonis Systems & A10 Networks Order the March 2014 issue of TSP here: http://www.amzn.com/B004T6Z0ME Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20 years of experience covering the tech sector. He is a former senior writer with Louis Rukeyser’s Wall Street. TechStockProspector.com, launched in 2003, is an investment-research service focused primarily on the networking, storage, security, wireless and software sectors. For more information or to sign up for the service (includes intraday research/analysis/commentary via the website and a monthly PDF newsletter), call TSP Customer Support: 800-392-0998.
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