3 Tech Rebound Stocks for 2012
NEW YORK. ( TheStreet) -- Everyone loves triumph in the face of adversity (as evidenced by the 'Lin-sanity' currently gripping the nation) so it's hardly surprising that investors are enjoying the tech sector's rebound after a moribund 2011.
|NetApp is one of the tech stocks rebounding in 2012|
NetApp is "on track to get its mojo back," explained Brian Marshall, an analyst at ISI Group, in a note, pointing to the storage specialist's solid third-quarter results last week. "NetApp illustrated the resiliency of its business this quarter and we believe it remains well-positioned to deliver solid growth over the next several years."
Microsoft is also in the spotlight after the software giant's stock hit a new 52-week high last week, while shares of hard disk drive maker Seagate are soaring as the challenges of 2011 disappear in the rear view mirror.
Read on for more information on why NetApp, Microsoft and Seagate are key tech rebound stocks for 2012: NetApp
After a couple of lackluster quarters, NetApp busted out decent third-quarter results and guidance last Wednesday, pointing to a turnaround in the storage maker's fortunes.
The EMC(EMC) rival met Wall Street's estimates, and projected fourth-quarter revenue and earnings in line with analysts' expectations, much to investors' delight.
"After missing Street expectations the last two quarters and turning many believers into skeptics, NetApp managed to turn in a solid quarter with balanced growth across products and geographies outside of U.S. Federal," noted ISI Group's Marshall, in his note.
Marshall maintained his NetApp buy rating and raised his price target from $47 to $50.
Speaking during a conference call to discuss the results, NetApp CEO Tom Georgens acknowledged that the company's major accounts have been a drag on revenue growth all fiscal year. "But we saw a bit of a rebound this quarter as the major accounts in all geographies other than U.S. public sector produced revenue growth in excess of fiscal year-to-date levels," he added.
NetApp also explained that revenue from OEM partners such as IBM(IBM) and Fujitsu grew 6% sequentially, while sales of the company's own branded products were up 4% over the same period.
Robert W. Baird analyst Jayson Noland says there's a lot for investors to like about NetApp. "We remain positive on NetApp's underlying market and continue to believe the company has competitive advantages," he explained, in a note released last week. "
Specifically, Noland highlighted NetApp's core competencies in Network Attached Storage (NAS) and the iSCSI networking protocol, which bode well for server virtualization, unified storage and the push towards 10-Gigabit Ethernet networks.