Watch These Stocks at Piper Jaffray's Technology, Media, & Telecommunications Conference
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Piper Jaffray is hosting its annual Technology, Media, & Telecommunications Conference in New York City on Tuesday, March 12 and Wednesday, March 13. Headquartered in Minneapolis, Piper Jaffray is a leading full-service investment bank and asset management firm.
While lesser known to readers than the largest banks on Wall Street, Piper Jaffray has a sterling reputation. Piper Jaffray Companies trades on the New York Stock Exchange and has a market capitalization of $700 million.
More than 150 industry-pioneering companies will present at Piper Jaffray’s upcoming TTM conference. Investors will hear from companies that are changing the technology sector on an unprecedented level. Here is my synopsis on a select few of the companies presenting, and any details investors should be looking to hear from management.
AT&T (NYSE: T)
A veteran component of the Dow Jones Industrial Average, shares of AT&T have risen more than 8% year-to-date through March 7.
Steve Caniano, Vice President of Hosting, Application and Cloud Services at AT&T, will give a keynote presentation to conference attendees on Tuesday morning at 8:30 a.m. Cloud computing is a growth area for AT&T, as corporations and software providers require a growing amount of online data storage.
The CFO of AT&T recently stated he expects 2% sales growth for 2013, and the company plans to return $40 billion of cash through dividends and share repurchases in the next 2 years. AT&T has a market capitalization of $200 billion and pays $0.45 in quarterly dividends, giving the stock a rich 4.5% yield.
Piper Jaffray is bullish on AT&T heading into its Technology, Media, & Telecommunications Conference, and recently reaffirmed an “Overweight” rating and $40 price target on the stock.
Green Dot (NYSE: GDOT)
Green Dot is a financial services operator that provides general purpose reloadable (GPR) and prepaid debit cards. The company’s reloadable debit cards are available for purchase at more than 60,000 retail locations online.
Green Dot’s principal competitor is NetSpend, which agreed to be acquired by Total Systems for $16 per share on Feb. 19. The announcement caused Green Dot shares to subsequently rise, as market participants placed bets that it would also become a takeover target. The $16 valuation for NetSpend prices the company at 3.0x Price / Sales, while Green Dot is currently trading at 1.0 x Price / Sales.
Analysts at SunTrust advised their clients to sell the news on Green Dot and take advantage of the temporary price appreciation. SunTrust does not believe that Green Dot is an acquisition target. First, unlike NetSpend, GDOT is a bank holding company and therefore would need to be acquired by another bank. Second, NetSpend had a larger commercial debit card business, while Green Dot is more exposed to the competitive retail market.
Piper Jaffray disagrees, and believes the company offered a strong outlook for 2013 when fourth quarter earnings were released on Jan. 31. The firm has an “Outperform” rating on the stock and a $16 price target, close to the current market price.
Green Dot is doing a post-IPO “road show” the week of March 11, with investor presentations on March 12 and 13, followed by further investor meetings on March 19. I recommend that readers use the exposure as a selling opportunity, as the debit card market is becoming more crowded with new entrants.
Sirius XM Radio (NASDAQ: SIRI)
For a $3 dollar stock, readers may be surprised to learn that Sirius XM Radio commands a $21 billion market capitalization. Shares of the satellite radio company are reaching five-year highs as subscription revenue continued to grow through the end of 2012.
On Feb. 5, Sirius XM reported fourth quarter results, earning $0.02 per share and revenue of $892.4 million. Subscribers reached a record 23.9 million during the October - December period. Free cash flow also increased 71% year-over-year to a record $709 million.
Following the company’s fourth quarter results, Piper Jaffray reaffirmed Sirius XM as its top investment idea for large capitalization stocks for 2013. The bank is bullish on the satellite radio company based on the strong subscriber growth. David Frear, Chief Financial Officer, will be presenting at Piper Jaffray’s conference on March 12 at 2:30 p.m.
The satellite radio company is also hosting its annual shareholder’s meeting in New York City on May 21.
Mel Karmazin, the former executive of CBS Broadcasting, left Sirius XM radio as of Feb. 1, 2013. Karmazin served as CEO of Sirius XM from 2008 until his last day at the company. His departure was triggered by Liberty Media’s increased stake in the company, which rose above 50% of outstanding shares in January.
John Malone’s Liberty Media received approval from the Federal Communications Committee for de jure control of Sirius XM earlier this year.
Foolish Bottom Line
Analysts at Piper Jaffray are bullish on AT&T, Green Dot, and Sirius XM.
I recommend that readers buy shares of AT&T, as the valuation is supported by a strong dividend yield. I disagree with Piper Jaffray on Green Dot, as market research indicates that the company is losing market share, which decreases its appeal as a takeover candidate. Green Dot should be sold, in my opinion. Finally, I am neutral on Sirius XM as I believe shares are fully valued.
Since the Piper Jaffray conference is by invitation-only, I am unable to publish a complete agenda and schedule. However, readers can learn more about the two-day event by visiting the press release on the firm’s website.
Thanks for reading, and consider subscribing to my posts for more Fool ideas on outperforming the market.
johnmacris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!
Looking for a new broker? John Macris has contributed to the content and design of the the tradeMONSTER online brokerage platform.