Author Archives: Scalper1

Universal Display Spikes On iPhone OLED Prospects

Universal Display ( OLED ) stock surged as much as 10.7% on Monday on a bullish report about the prospects for its OLED display technology and materials in smartphones, including next year’s rumored iPhone 8 from Apple ( AAPL ). Universal Display shares were up 9.5%, near 62, in afternoon trading on the stock market today . The stock hit a recent high of 63 on April 19, which is just below its all-time high of 63.58 from April 2011. Goldman Sachs analyst Brian Lee on Monday raised his rating on Universal Display to buy from neutral and upped his 12-month price target to 76 from 55. OLED is a “secular winner” as devices shift from LCD to OLED displays, which boast richer colors and low power usage, Lee said. “In the near term, we expect (Universal Display) to be a key beneficiary of Apple’s first-time adoption of OLED displays for iPhone starting in 2017,” he said. “Beyond Apple, we see OLED benefiting from a secular shift across the handset market with roughly 10% penetration today but a potential ‘LED 2.0’ hockey-stick adoption across multiple product cycles and categories in coming years.” In a “blue sky” scenario, OLED could reach 100% penetration of smartphones, 50% of tablets and 20% of TVs after 2020, he said. RELATED: Universal Display Facing ‘Frothy’ OLED Expectations

Two Techs In Hyper-Growth Mode Positioned For Solid Earnings

Splunk ( SPLK ) and Pure Storage ( PSTG ) are positioned to deliver solid earnings this week, despite a challenging environment for spending on information technology, analysts say. Pacific Crest Securities analyst Brent Bracelin said in a research note Monday that Splunk remains the firm’s “highest-conviction growth idea that continues to deliver solid results.” And he said Pure Storage has emerged as the largest and fastest-growing provider of flash-based storage technology “that we believe remains well positioned to grow 60%-plus this year, driven by share gains in a shrinking storage market.” IBD Take: Splunk ranks No. 4 in its group. Learn why at IBD Stock Checkup . Splunk provides software for machine-to-machine data analytics that companies use to attain real-time intelligence. The consensus on Splunk is for revenue of $174.1 million for its fiscal Q1 ended on or near April 30, according to a poll by Thomson Reuters. That would be an increase of 38.5% year over year, maintaining its double-digit growth rate going back more than four years. Analysts expect a 2-cent loss per share minus items, vs. a 1-cent loss in the year-earlier quarter and an 11-cent profit in the previous quarter. Splunk is set to report after the market close Thursday. “We remain bullish on the prospects for Splunk to grow into a $1 billion-plus revenue franchise based on a differentiated software,” Bracelin wrote of the company that posted revenue of $668 million for fiscal 2016 ended Jan. 31. RBC Capital Markets analyst Matthew Hedberg has an outperform rating on Splunk stock and a price target of 60. Splunk shares were near 54, up 2%, in afternoon trading in the stock market today . The stock is 81% higher since hitting a low of 29.85 on Feb. 12. Pure Storage, meanwhile, is set to report earnings after the market close Wednesday for its fiscal Q1 ended April 30. The Wall Street consensus estimate on revenue is $138 million, up 86% year over year, following 12 quarters in a row of triple-digit gains. The bottom-line consensus is for a per-share loss minus items of 23 cents, vs. a 26-cent loss in the year-earlier quarter. Pure Storage received an upbeat review ahead of its Q1 report, with an analyst saying the flash storage market appears to be growing faster than expected. Pure Storage stock was trading near 14.75, up 1.5%, Monday afternoon. It came public in October 2015 with shares priced at 17. Other tech companies reporting this week include  Hewlett Packard Enterprise ( HPE ) and HP Inc. ( HPQ ) Hewlett Packard Enterprise, which provides business enterprise services and cloud-enabled technologies, is projected to report revenue of $12.3 billion and EPS minus items of 42 cents. It reports after the close Tuesday. Hewlett-Packard Enterprise was trading near 16, up 1.5%. HP, which sells personal computers and printers, reports its fiscal second quarter after the close Wednesday. The consensus on revenue is $11.7 billion, with views for EPS minus items of 38 cents. HP stock was near 11.70, up a fraction.

Quietly, Telecom System Builders Emerge As Leaders

While makers and sellers of smartphones and tablet PCs are glamour brands, some of the companies that make the equipment to make those devices work are quietly turning into attractive investment choices. The telecom infrastructure industry group remains in the bottom half of IBD’s rankings, yet it’s made a rapid advance over the past few weeks as its leaders shape attractive charts. The group ranked No. 107 in IBD Weekly, up from 147 four weeks ago. Three top-rated stocks in the group are of particular interest because they have topped or are approaching buy points. The most critical to watch now is Broadsoft ( BSFT ), which rose above the 42.16 buy point of a base-on-base pattern Monday in active trading. For the stock, it’s been an impressive rebound after the May 2 earnings announcement rattled shares. Although it beat profit expectations, Broadsoft projected its current-quarter operating EPS below views . Shares fell as much as 11% on the news, but they quickly recovered and continued working on the base until Monday’s breakout. The company helps big telecoms deliver unified communications, integrating voice, video and text messaging and other forms into a single stream. Dycom ( DY ), which is on the IBD 50 , is trying to break out past a 73.28 buy point. With the earnings report due Tuesday after the close, it could be the next telecom infrastructure stock to make a move. Analysts expect Dycom to earn 74 cents a share and to report sales of $597.8 million. Dycom has a nearly perfect EPS Rating of 98. In a report Monday from D.A. Davidson, the research firm said, “ AT&T ( T ), Verizon Communications ( VZ ) and other presumed Dycom customers have announced plans for ongoing major fiber expansion, suggesting near-term growth in wireline construction activity will continue to be robust.” Those same trends figure to aid other telecom infrastructure companies. Indeed, capital spending by the major telecoms drives much of the infrastructure industry’s fortunes. CommScope Holding ( COMM ) is forming a cup-with-handle base with a buy point at 31.80. The Hickory, N.C.-based company helps telecoms design, build and maintain wired and wireless networks. Ubiquiti Networks ( UBNT ) broke out of a base May 6 after it reported earnings. Ubiquiti, which builds wireless networks around the world, beat estimates. Earnings and sales growth have accelerated the past few quarters, following a slump in the first half of 2015 that saw EPS and sales decline. The stock is in buy range from the 37.20 buy point.