QUALCOMM, Inc. (NASDAQ:QCOM) and Stratasys, Ltd. (NASDAQ:SSYS) are two of the top picks of 2015 for Sarat Sethi, the managing director and portfolio manager at Douglas C. Lane & Associates revealed in a discussion on CNBC.
Sethi picked QUALCOMM, Inc. (NASDAQ:QCOM), Stratasys, Ltd. (NASDAQ:SSYS) and Google Inc (NASDAQ:GOOGL) from the tech sector, a sector which he said he likes and thinks has not appreciated as much as the other sectors had.
“Take a QUALCOMM. Today, the news came out that China is finally about to have some type of resolution about all their royalties. What’s happened to QUALCOMM is that their earnings keep on growing,” Sethi said.
The investor was referring to QUALCOMM, Inc. (NASDAQ:QCOM)’s troubles in China. Earlier this year, it was reported that Chinese authorities were investigating the company for possibly flouting the country’s monopoly laws. This was believed to have affected the company’s ability to get royalties in the territory.
Sethi said that now, QUALCOMM, Inc. (NASDAQ:QCOM) is at 12 times earnings. He also noted that the company has a great balance sheet and a dividend that is growing 10% per year. If the issue in China is resolved, he said that the company is expected to experience more top line growth in the next two to three years because of its entrenched role in telecommunications.
Meanwhile, Sethi also likes Stratasys, Ltd. (NASDAQ:SSYS) in the 3D printing space.
“Stratasys is the leader in 3D printing. […] The negative of Stratasyst today are two things. One is they’re growing and they’re spending more money on operating expenses. I like that when a company wants to grow their top line and grow their earnings because they’re spending,” he said.
The second negative for Stratasys, Ltd. (NASDAQ:SSYS) is that Hewlett-Packard Company (NYSE:HPQ) is spinning out their printing business and people see it as a challenge to Stratasys. However, Sethi said that the 3D printing company is so far ahead of its competitors that a move by Hewlett-Packard does not matter.
John H. Scully’s Spo Advisory Corp owned about 7.71 million QUALCOMM, Inc. (NASDAQ:QCOM) shares by the end of the September quarter. Also by the end of this period, Donald Chiboucis’ Columbus Circle Investors owned 383,753 Stratasys, Ltd. (NASDAQ:SSYS) shares.