Analyst Explains Why He Loves Salesforce And Fiserv
Benzinga recently spoke with Federico Flom, MBA, analyst at , who said "one of the most compelling technology plays in the market" is salesforce.com, inc. (NYSE: CRM). He said the stock has the potential to generate more than 25 percent upside in the next two months.
"Salesforce is the leader in a diverse set of cloud services," he expounded. "After several years of exciting high-growth, the company is turning into a more mature tech business with less erratic growth and more attention towards creating profits and sustained profitability."
The expert noted that the shares have been trading in a ~15 percent range over the past six months, adding that he believes that "the recent earnings report, which surprised consensus estimates and included a strong guidance for both FY16 and FY17, can make the stock start to move higher again with considerable volume."
"This is a leading company, in a growing industry that has been experiencing double-digit growth rates in the past quarters in terms of revenue and EPS growth," he concluded.
The analyst then went into Fiserv Inc (NASDAQ: FISV), which recently announced the buyback of 15 million shares. "I expect FISV to break a key $97 level and move higher from there," the expert stated. "Fiserv is a high quality stock that reported strong earnings in the recent report, raising 'guidance for FY15, projecting EPS of $3.84-$3.87 vs. prior outlook of $3.73-$3.83 and vs. $3.82 Capital IQ Consensus Estimate.
There are three key catalysts: "a high quality company in terms of fundamentals, a recently announced buyback and the latest earnings report which surprised expectations."
"The stock has been moving in a very tight range despite the recent market weakness. I believe that if FISV moves above $97 with strong volume, the stock may start to move higher consistently, offering a potential return of 10% in less than 2 months according to my models," he ended.
Disclosure 1: Federico Flom is long Fiserv (FISV)
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