|Written by GSCR Staff|
|Wednesday, 19 November 2014 08:05|
In Monday’s Goldman Guide we said now is the time to re-shuffle your satellite portfolio for 2015.
Technology stocks will be in play, especially software security. Today we have two oldies but goodies.
One of our favorite stocks which we have featured several times over the past two years is LifeLock, Inc. (NYSE – LOCK - $17.26). The stock has had its ebbs and flows but is currently at the over 80% increase in price level since our initial coverage. The identity and fraud protection services firm has carved out a nice niche and remains a strong long term investment. The Company has a solid line up of products and services for the individual consumer and has consistently expanded into the enterprise solutions arena as evidence with the recent introduction of its new LifeLock Data Breach Service. This service enables organizations to rapidly activate LifeLock if they are exposed by a data breach and help protect their customers or employees from identity fraud. This is something definitely on the forefront of Chief Technology Officers everywhere.
All the standard checks apply for LOCK. A forward P/E 5 points lower than the trailing with increased revenue of 27% projected for 2014 over 2013. LOCK should make the jump over the $20 mark in 2015 with ease.
Another tech stock that we need to get on the way back machine for, in relative terms, is Entegris, Inc. (NASDAQ – ENTG - $13.59). The stock has also had its ups and downs but is currently up over 36% since our initial feature in June’s 30-30. Below is the chart representing the stock’s performance over this time. Notice the stock price currently well above the technical indicator 50-day EMA.
ENTG – 18 Month Chart
One of our key drivers for success going forward was a turnaround in EPS. The Company has had positive surprises compared to estimates three out of the last four quarters and is forecast by consensus analysts to have over a 30% CAGR in EPS growth rate over the 2013 for this year and next.
Entegris is a supplier to OEM in the semiconductor, microelectronic, and other high tech firms. The Company operates in three segments: Contamination Control Solutions, Microenvironments, and Specialty Materials. The Company recently released its new VaporSorb(TM) line of airborne molecular contamination (AMC) filters. The new filter was created as an "all-in-one," single-filter solution for capturing critical AMC in the chemical mechanical planarization process, or CMP, in semiconductor manufacturing. With nearly $400 million cash on hand Entegris should be able to continue to introduce new products and services.
A small short float of 5.5% is a decent sign for going long. A forward P/E of 15 is nearly 7x lower than the trailing P/E. ENTG should reach $17.50 again next year.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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