5 Strong Tech Stocks For A Volatile Market
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Investors are still finding value in the tech sector, even in today’s volatile market. “Tech’s become the answer for everything. It’s the play for growth ideas, it’s the play for a solid fundamental growth story, and the play for rising interest rates,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC recently. That’s good news given the latest round of Fed tightening.
And while trade war fears have roiled the market, experts are skeptical about President Trump’s $200 billion Chinese tariff threat. Goldman Sachs CEO Lloyd Blankfein described it is a simple negotiating tactic: “That’s what you would do if it was a negotiating position, and you wanted to remind your counterparty just how much fire power you had to bring to the negotiation.”
With this in mind, we turned to TipRanks’ recently revamped Stock Screener to pull up ‘Strong Buy’ tech stocks that are looking undervalued right now. These are stocks with big upside potential. You can set the filters to screen for only tech stocks with over 10% upside potential from current levels. Crucially, we double-checked that these stocks have a ‘Strong Buy’ outlook from both analysts and top-rated analysts alike. As you will see below, all the analysts referred to in this piece are the best stock pickers on the Street right now.
Let’s take a closer look:
1. Zayo Group Holdings (NYSE:ZAYO)
If you haven’t heard of dark fiber before, you’re in for a treat. This unused fiber can be purchased or leased to create a privately operated optical fiber network run directly by its operator. In the world of dark fiber, ZAYO is king. It is the largest provider of dark fiber in the US and targets large enterprise customers who need 10 Gigabit+ connections.
According to top Oppenheimer analyst Timothy Horan: “Zayo has unique bandwidth (fiber/datacenter) infrastructure assets derived from over 30 acquisitions and consistently high CAPEX spending.” Furthermore, “its dense, scalable infrastructure is difficult to replicate without significant capital expenditures and time-to market.”
He has a $42 price target on the stock (15% upside potential). Longer-term he notes that 5G should act as a robust driver for Zayo’s fiber assets. Delve into the ‘Strong Buy’ analyst consensus rating by clicking on the graph below:
2. Microsoft (NASDAQ:MSFT)
Microsoft is buzzing right now. Analysts are very excited about the company’s new gaming plans. Top-rated Morgan Stanley analyst Keith Weiss describes Microsoft as “moving from Gillette to Netflix” in its new gaming offering. No longer will gamers require the $400 Xbox console to access games. Instead MSFT will offer a subscription-based service that will enable gamers to stream games from its cloud-based Azure platform to all types of devices.
The advantage to MSFT here is clear. Not only will it open up a whole new audience to MSFT’s games, it will also generate a consistent revenue stream. Weiss notes that Microsoft is now adding five new development studios to ramp up its first-party content output. According to Weiss, gaming could push MSFT to the much-hyped $1 trillion market cap.
This five-star analyst has a bullish $130 price target on Microsoft (30% upside potential). Meanwhile the average analyst price target comes in at $114 (14% upside potential). In the last three months MSFT has received 16 buy ratings with just 1 hold rating and 1 sell rating:
3. AllScripts (NASDAQ:MDRX)
It’s worth keeping a close eye on top medtech stock AllScripts. MDRX provides physicians, hospitals, and healthcare providers with practice management and electronic health record technology. “The stock offers 43% upside potential to our 12-month price target of $18” cheers five-star Cantor Fitzgerald analyst Steven Halper.
He is very encouraged by a recent bout of savvy deal-making: “We continue to believe that Allscripts’ growth outlook has improved after a series of strategic acquisitions. The acquisitions of McKesson’s EIS business and Practice Fusion added a significant amount of recurring revenue.”
Plus the company has been “pretty active” in stock repurchases in 2Q18. This activity is a logical indicator of confidence in underlying fundamentals says Halper. He concludes: “We believe MDRX is in a good position to post strong earnings growth in 2018 and 2019.” Click on the graph below for further MDRX insights:
4. Imperva (NYSE:IMPV)
This cyber-security tech stock has upside potential of 16% according to five-star Oppenheimer analyst Shaul Eyal. He has just boosted his price target from $55 to $60. Most encouragingly, Imperva has recently launched FlexProtect. This is a single license offering customers the ability to deploy Imperva products how and when they want.
“We believe FlexProtect is continuing to garner significant traction among customers interested in employing hybrid cloud environments given the versatility of its underlying architecture” states Eyal.
And overall: “IMPV has established itself as a leader in the database security solution markets, and we believe the company could have a total addressable market of $4.5B with a CAGR of 20%”.
5. Asure Software (NASDAQ:ASUR)
Brace yourself for growth! With approx 7,000 clients worldwide, Asure Software provides tech solutions for a remote workforce and workplace. Five-star Canaccord Genuity analyst David Hynes sees a long-growth runway ahead for ASUR.
Following the company’s upbeat annual investor event he wrote: “While M&A will continue to be the short-term driver of the numbers and stock, we came away from our meetings in Orlando with confidence that Asure is building something more enduring, which ultimately will be the driver of long-term value creation.” In other words “Asure is making integration, modernization and innovation investments across the stack that should strategically position the firm for sustainable growth.” He has a $20 price target on ASUR (17% upside potential).
