There are plenty of ways to buy into tech. But the one thing you need to make sure is that any tech company you buy has growth, and plenty of it.
I’ve chosen seven “strong buy” tech stocks; you may also notice these aren’t the massive blue-chip tech names. These companies are a bit more volatile but their upside is also much greater than the blue-chip behemoths.
Many of these stocks are still under the radar of most Wall Street analysts, which means once the institutions get wind of them, they’ll be off to the races. And if you’re in before that happens, you’re in for one heck of a nice ride.
Here are seven tech stocks that are strong buys:
7 Tech Stocks That are Strong Buys: Ambarella (AMBA)
Ambarella (AMBA) has been a tear almost since it went public in 2012. The stock is up almost 1,900% since its IPO, 300% in the past year and 128% year to date.
The crazy thing is, its rise has only just begun. AMBA has caught the tsunami of the online video-cation of literally everything. Now that bandwidth is becoming faster and more accessible, particularly on mobile devices, videos of everything are popping up everywhere.
AMBA makes semiconductor processors for HD quality video. And its main client is GoPro (GPRO), the maker of small, rugged cameras that have taken the world by storm.
But GoPro is just the beginning. AMBA is a major player in sectors like self-driving cars and unmanned aerial vehicles, which promise to be huge growth sectors as well.
AMBA is perfectly situated to take advantage of the enormous growth in both the consumer and industrial markets for its pioneering technology. This one has miles to run before it tires.
7 Tech Stocks That are Strong Buys: Palo Alto Networks (PANW)
Palo Alto Networks (PANW) is one of the top cybersecurity companies in the market. And if there’s one sector that will grow regardless of events in Europe and China, it’s cybersecurity.
U.S. companies have understood the need for upgrading their systems but as they emerged from the financial collapse in 2008, they have used their limited resources to strengthen aspects of the business that had direct implications to the bottom line.
It hasn’t been until recently as massive data breaches have spurred consumers and consumer advocacy groups to start expecting more from the corporations that store our financial and other proprietary data.
And a recent case has corporate America paying a lot more attention. Until now, most companies couldn’t be sued by individuals for their data breaches because individuals had to prove harm.
But the 7th Circuit Court of Appeals reinstated a lawsuit last week against Neiman Marcus over a 2013 data breach in which hackers stole credit card information from as many as 350,000 customers. The judge reinstated both types of claims against Neiman Marcus — those who had incurred expenses tied to the hack, and those who feared identity theft in the future.
If companies end being held liable for these hacks, you can be sure cybersecurity companies will see significantly robust growth.
7 Tech Stocks That are Strong Buys: Avago (AVG)
This was a big deal on three levels:
- It’s literally a big deal; the purchase is valued at $37 billion in cash and stock.
- If all goes well with Federal Trade Commission regulators, it will establish AVGO as the No. 3 semiconductor maker in the U.S.
- AVGO has been on an acquisition spree recently, buying up complementary firms to add value to its offerings and eventually add support across its various lines. Incorporating BRCM will mean the new company will be major player in both Apple (AAPL) and Samsung (SSNLF) phones, from the iPhone 6 and 6 Plus and Galaxy S5, S6 and beyond.
BRCM is the biggest buy yet in AVGO’s strategy of growth by acquisition in non-competitive sectors. Each acquisition brings with it something that helps AVGO’s bottom line while also helping to create a more attractive one-stop shop for its telecom clients.
AVGO has proven with its other acquisitions that it is very good at getting all the value possible from its mergers. Bringing in BRCM should mean some really big quarters in the next year, after the deal is official.
AVGO stock is up 80% in the last 12 months and has plenty of headroom left.
7 Tech Stocks That are Strong Buys: Cambrex (CBM)
Cambrex (CBM) is the leader in a market known as Contract Manufacturing Organizations (CMO). And it’s becoming very big business.
Market research firm Visiongain forecasts that the worldwide pharmaceutical custom manufacturing market will grow to $71 billion by 2018.
CMOs allow drug and biotech companies farm out their research and development on certain drugs they’re developing. Cambrex specializes in late-stage development (Phase II trials and beyond) where there’s a higher chance of product approval, less competition and higher asset utilization.
It has six operation sites in the U.S., European Union and India. And its FDA recognition as a certified GMP (Good Manufacturing Practices) producer helps a great deal with its clients when it comes to getting trials and testing done with as little trouble and as quickly as possible. All Phase II and Phase III trials require GMP facilities.
At this point, 60% of CBM’s revenue comes from new drugs it builds for drug companies. About 24% comes from generics and 14% comes from controlled substances.
And if that’s not enough, one of its biggest clients is Gilead Sciences (GILD). It worked on the GILD’s hugely successful hepatitis C drugs and will reap the benefits from them for years to come, as well as it other pipeline prodigies.
7 Tech Stocks That are Strong Buys: ANI Pharmaceuticals (ANIP)
ANI Pharmaceuticals (ANIP) develops, manufactures and markets branded and generic drugs. It’s a relatively small biotech, but it has some exciting growth ahead of it.
The stock is up 25% year to date, even after cratering from $71 to $49 in May. Much of that hit was due to weak first-quarter numbers but it is apparent to the analysts and institutions that ANIP has a lot more to show for itself in 2015.
What’s more, because its generics are where ANIP makes most of its money, it is also becoming an increasingly attractive buyout target as generic drug manufacturers begin consolidating. The Affordable Care Act has led to a scramble across the healthcare sector as insurers, hospitals and drug makers look to grow so they can have more pricing power against one another.
The massive $40.5 billion purchase of Allergan (AGN) by Teva Pharmaceuticals (TEVA) is the most recent case in point. And that deal was inked while AGN was buying biopharmaceutical firm Naurex for $580 million and Teva was also trying a hostile takeover of rival Mylan (MYL).
ANIP has plenty of organic growth ahead of it without a suitor; this is very hot sector right now and ANIP is still flying under the radar. It’s a bargain.
7 Tech Stocks That are Strong Buys: AMAG Pharmaeuticals (AMAG)
AMAG Pharmaceuticals (AMAG) is another under-the-radar specialty pharmaceutical player. But it’s not in the generics niche. It has three products in its portfolio that are allowing it grow at an impressive rate.
The first is Feraheme, which is used for the treatment of iron deficiency anemia in adult patients with chronic kidney disease (CKD). Since this is a chronic condition, Ferheme is used regularly.
The second, is a newly acquired product, Makena. Under its Lumara Health division, Makena is a progestin used to reduce the risk of preterm birth in women that are carrying a single child.
The third is MuGard, an oral wound rise that’s used for mouth ulcerations and other diseases that manifest symptoms in patients’ mouths.
AMAG’s last earnings report blew the doors off its expectations. Total revenues for the second quarter of 2015 increased to $123.9 million, compared with $24.8 million in the second quarter of 2014. Most of this massive difference is attributed to onboarding Makena.
On a GAAP basis, earnings were $61 million for the quarter compared to $1.2 in the same quarter last year.
AMAG recently bought Cord Blood Registry for $700 million in cash. This company is the largest repository for stem cells for pregnant women and their families. It also just issued $200 million in new shares to pay for some of that acquisition and to expand into new markets with its existing product line.
AMAG also bought the rights to a promising orphan drug candidate from Velo Bio that is targeted at pregnant women with severe pre-eclampsia.
7 Tech Stocks That are Strong Buys: China Biologic (CBPO)
While there’s plenty of wreckage from the great Chinese stock crash, at least one Chinese company, China Biologic (CBPO), has walked away unscathed.
Even after the recent maelstrom, CBPO is up 78% in 2015 and 164% in the past year. This spells opportunity for smart long-term investors. It’s a chance to get into one of the biggest trends in China at a small discount.
One of the sectors China has to modernize to be considered a developed nation is its healthcare system. It’s a huge job.
But China isn’t wasting any time. First, the country allowed Western companies to serve the growing market. But now, China is committed to developing its own pharmaceutical, biotech and equipment companies.
It’s also focused on building its generic drug manufacturing expertise, since providing branded drugs to so many people just isn’t economical for a public healthcare system.
CBPO fits into this new dynamic very nicely. It has been a niche player within China that is now growing operations. CBPO’s products treat what are generally considered “rare” diseases like hemophilia. Its local company status means it has a real advantage over foreign competitors at this point.
It’s also has been buying other biotechs and acquiring other equity stakes to expand its market share and reduce its internal competition.
CBPO is well-positioned for the massive healthcare growth in China, and it has good visibility (and accessibility) to Western investors and institutions.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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