by Ian Harvey
IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.
Thursday, 14th July, 2016
Tableau Software Inc (NYSE:DATA) Calls
**OPTION TRADE: Buy the DATA Aug 19 2016 60.000 call at approximately $1.75. Sell price is left to your own judgment.
Tableau Software Inc (NYSE: DATA), a computer software company, plummeted 49% in a single day back in February — one of the steepest earnings-induced drops ever seen. But it bottomed soon after that collapse, and has been in a solid uptrend ever since.
Pacific Crest sees better times ahead as the firm kicks off a multi-city road show for its new software release.
Analyst Brent Bracelin attended one of Tableau’s first roadshow events in Seattle yesterday, which he notes had more than 800 participants. The company showcased next major version of Tableau software, version 10.0—which is expected to be released “very soon”—and he saw high customer interest and product feedback, especially for features like database integration, cross-database joins, automatic filtering and a refreshed user interface.
This bolsters his thesis that revenue growth could accelerate in the second half of the year, and he calls the shares a buy given their reasonable valuation. He has an Overweight rating and $93 price target on the stock.
Investor sentiment on DATA remains mixed, as demonstrated by the valuation discount relative to other high-growth software peers that have risen significantly since the market bottomed in February. While competitive risks remain high, we believe license growth is poised to reaccelerate to 22% y/y in the second half after bottoming at 14% in 1Q16. Improving sales productivity, a seasonal uptick in large deals and the v10 cycle should all help.
Narrative should improve from here; buy DATA. Not much has to go right for DATA shares to grind higher, in our view. The narrative should improve from here with potential positive catalysts including (1) addition of a president by year-end to strengthen the leadership team, (2) accelerating license growth, (3) formal release of Tableau version 10, and (4) likelihood for margin and multiple expansion.
Tableau shares are down 0.4% to $52.93 in recent trading.
Tuesday, 12th July, 2016
Intel Corporation (NASDAQ:INTC) Calls
**OPTION TRADE: Buy the INTC Aug 19 2016 35.000 call at approximately $0.60. Sell price is left to your own judgment.
Intel Corporation (NASDAQ: INTC), a designer and manufacturer of digital technology platforms, has moved up more than 10% since the Brexit saga, which hit the capital markets last month. With help from one or more positive developments, the chip maker has been able to gain investors’ confidence. Based on all these developments, it is expected that the stock will hit a new 52-week high soon.
There have been several positive catalysts for Intel, and one of the latest developments is that it won a contract to supply chips for the iPhone 7, which have helped greatly. Also many analysts added the chip maker to their bullish books, helping it add to its gain.
It is now believed that the chip maker is now in the same position as it was in 2001. Optimism surrounds the company as many see that cloud computing as the next big thing and that the chip giant is poised well to benefit from this. Five years from now, Intel could grow by 15% per year with help from the growth of smartphones and the internet.
Also, bullish recommendations from numerous brokerage houses could act as positive catalysts going forward. Popular research firms like RBC, Mizohu and Argus have raised their price targets and ratings on the chip maker.
Also, BofA/Merrill Lynch very recently mentioned that Intel Corporation is set to turn around its performance, as it is likely to boost sales and earnings per share (EPS) by 4% and 10% per year, respectively, after five years of muted 1% growth in both metrics. The acceleration and turnaround is driven by shift in the mix toward growth products, such as cloud networking, along with a headcount cut of almost 11,000 employees.
The last analyst recommendation trend saw 10 Analysts assigning the stock as a Strong Buy, and another 15 said it’s a Buy.
The current average price target for Intel stands at $36.06, which is above its 52-week high. Thus, we can expect it to hit a new high very soon.
Of all the mega-cap tech stocks, INTC is quietly having one of the best years, rallying 24% off the February lows. INTC used the recent market strength to break through resistance at $33, and is now headed towards $35.50. If it can beat this next test, it can easily retest the $38 level and make this trade a big winner.