Time for our yearly swag at on which tech stocks could rebound or be acquired in 2016.
Going into 2016 there is reason to believe there will be quite a bit of volatility this year. China, Oil, Interest Rates along with a tepid recovery have set the stage to make everyone at least somewhat nervous. That said, there are still some compelling values and with rates still low there could be some M&A or rebounds that occur in these names this year. Here are some names I like that warrant further research.
Ambarella – AMBA – This stock is hated due to being linked to GoPro which had a rough year, however, Ambarella is not entirely dependent on GoPro though they have been a major account. The great news for the company is that they can also sell products to many other including drone manufacturers. This maker of chip designs for HD video capture seems beaten down enough that it could rebound or be acquired in 2016.
Barracuda – CUDA – In 2015 the stock went from being a darling of the security space to being a pariah. Given the portfolio of products and strong growth still exhibited in this segment the value of the company could draw attention from activists and potential acquirers.
Envestnet – ENV – Envestnet which provide wealth management technology among other things has taken a beating in recent months. Given their unique offering look for the to rebound or get snapped up in 2016.
NII Holdings – NIHD – Brazilian mobile operator. Fresh out of bankruptcy just a while back it has gone nowhere but down. The Brazilian economy is definitely a serious drag, however, the spectrum they own is real and appears to be worth more than the company is trading for. Will a big international player scoop them up this year or wait for further carnage?
Firsthand Technology Value Fund – SVVC – Company invests in private equity and late stage startups. Shares trade at a substantial discount to the net asset value of the portfolio and there are some nice positions you can participate in by owning shares. Management fees will ding any potential returns but it appears to have a good risk/reward outlook in the short and intermediate term.
Lumos Networks – LMOS – This regional fiber provider just can’t seem to get much love. Given that the shares trade near the low for the year this is a repeat recommendation from me. The investments and strategy the company embarked on in 2014 and 2015 should make this the year they should start to pay off.
3D Systems – DDD and Stratasys – SSYS – To say that the market and analysts hate the 3D printing sector would be an understatement. Are we now in the Valley of Despair? Long-term the potential of this space is just to big to ignore. For companies that need or want to play in this space now seems like a good time to consider picking one of these up from the scrap heap. Cough cough HP.
Qualcomm – QCOM – Could head lower in the short-term but I like it as a long-term pick. Antitrust among a few other concerns have bashed the stock. The yield on this company should start to offer some support as it nears 4%. That said, in a bad mark it may find its way into the 30s.
Twitter – TWTR – Is this the year the Twitter finally defines itself? The platform has too much potential to languish as it has. Look for Jack to start to get some momentum or Twitter will likely be sold to the highest bidder.