By Steve Reitmeister, Editor in Chief of TipRanks
This is my second article in a series sharing my best stock ideas for the year ahead. Last week I highlighted “3 Value Stocks for Today’s Market”.
This week we turn our attention to tech stocks given the unnecessary beating many of them took during the Q4 correction. However, some did deserve to get their valuations right sized after years of excess. Below I share 3 tech stocks with ample growth opportunities and attractive valuations that make them primed for outperformance in 2019.
This is almost a no brainer as this is the prime FANG type stock of China that completely dominates the regions expanding ecommerce business. Yes, the Chinese economy is clearly suffering of late because of the trade war with the US. But that will only motivate their government to find a resolution in coming months to get the economy back on track.
So put it this way. Do you doubt that BABA will continue to grow in the years ahead? Do you doubt that shares will be higher 1-2-3 years into the future?
So let’s take advantage of their recent fall from grace when the average analyst expects shares to get back to around $200. Even better is that some 5 Star analysts see shares getting as high as $260 representing a 62% rise from Tuesday’s close.
Cloudera provides Big Data, Machine Learning and Artificial Intelligence services in a cloud based environment for businesses. Definitely a growth market. Even better is that they keep exceeding growth expectations with an average earnings beat of 45% the past four quarters.
There are several 5 star tech analysts pounding the table on this stock given the tremendous business outlook. That is why the average target price from this crowd is $19.86, which is a healthy 53% above current levels.
Beyond that we have Bullish indications from Bloggers. Positive signal from Insiders. Ditto for Hedge Fund Managers.
There will be days you curse this stock given that it is a small cap and high beta. But if the bull market continues to get back on track, then it is exactly the kind of position that should outperform. And given the upside to the average target price, then it should outperform by a wide margin.
Marvel Technologies (MRVL)
This is one of the most consistent earnings outperformers in the semiconductor space. That is important to note for what is typically a very volatile industry with unpredictable earnings results.
Unfortunately they were another undeserving victim of the market correction and tech wreck. So even though their growth outlook remained bright, shares declined 43% peak to valley before joining the post-Christmas bounce. Gladly there is still plenty of upside potential in shares as analysts have an average target price of $24.15 (33% above current levels).
Bloggers and News Sentiment are also pointing positive for MRVL. But even more telling are the indicators for Insiders and Hedge Funds with 1.7 million shares recently added. Add up all these positives and you understand why this could be a “Marvelous” addition to your portfolio.
(BABA, CLDR and MRVL are just 3 of the stocks I have selected for the Smart Investor portfolio. There you will see many others stocks loaded with positive TipRanks indicators that are primed to outperform in the year ahead. Discover the Smart Investor portfolio here).
Disclaimer: In general, I own the stocks that I highlight in commentary. When you think about it…why would you ever take advice from an investment professional who wasn’t willing to put his money where his mouth is?