Although the sell-side can be unabashedly and mistakenly optimistic at times, many investors regard analysts as very knowledgeable market participants that can decide short term price action for many stocks.
Given those views, we have put together a list of the latest analyst commentary concerning several major tech stocks, QUALCOMM, Inc. (NASDAQ:QCOM), NXP Semiconductors NV (NASDAQ:NXPI), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), and one beleaguered healthcare stock, Mylan NV (NASDAQ:MYL). We have also scoured the data from the last round of 13F filings to determine what hedge funds and other investors we track think about the five stocks.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
After the news broke that QUALCOMM, Inc. (NASDAQ:QCOM) was interested in buying NXP, many analysts expressed support for Qualcomm this week. Among them, Cowen analyst Timothy Arcuri hiked his price target to $74 per share from $62, estimating that a potential purchase of NXP at around $115 per share with debt, cash, and stock would be 20% accretive to Qualcomm. Rod Hall, a JPMorgan analyst, increased his price target to $70 from $63, also saying that the potential merger would help unlock value for long-term shareholders. Hall noted that Qualcomm has around $29 billion in cash overseas to facilitate the potential deal. Ken Fisher’s Fisher Asset Management inched up its stake in QUALCOMM, Inc. (NASDAQ:QCOM) by 2% in the second quarter to over 9.68 million shares at the end of June in .
Given that it is a buy-out candidate now, it isn’t a surprise that analysts were tripping over themselves to estimate how much NXP Semiconductors NV (NASDAQ:NXPI) could ultimately sell for (initial reports have said the talks are for over $30 billion, which works out to over $95 per share). As mentioned previously, Cowen analyst Timothy Arcuri believes NXP could ultimately be sold for $115 per share (or around $13 per share above current levels) and still deliver value for Qualcomm shareholders. William Stein of SunTrust is a little bit more bullish, estimating that NXP could be bought for $124 per share using recent takeover valuations in the sector. As always, analyst commentary should be taken with a grain of salt as not everything is knowable. Of the around 749 funds that we track, 57 of them were long NXP Semiconductors NV (NASDAQ:NXPI) at the end of the second quarter, up by five funds from the previous quarter.
Click next to see what analysts had to say about Amazon, Apple, and Mylan NV.