The following stocks have been added to the Argus Focus List, available through Yahoo Finance Premium:
Arista Networks Inc. (ANET): Arista is a leading supplier of cloud networking solutions for internet companies, cloud service providers, and next-generation data centers. It generates the largest portion of its revenue from switching products. The stock fell recently on a downbeat revenue outlook and news that a cloud titan customer had informed Arista of a material reduction in orders. We believe the selloff represents an opportunity to establish a position in this cloud-networking pioneer. We see no evidence of competitive share loss, and believe the digestion phase among leading customers is part of the business cycle in a fast-formulating environment.
NextEnergy Inc. (NEE): NextEra provides regulated and nonregulated energy-related services, with a presence in 36 U.S. states, four Canadian provinces, and Spain. Its principal wholly owned subsidiary, Florida Power & Light, serves five million customers in Florida. NextEra Energy Resources, a nonregulated electricity-generating subsidiary, is the largest U.S. generator of wind and solar power. Through its subsidiaries, NextEra also operates one of the largest fleets of nuclear power stations in the U.S. We see opportunities at the nonregulated NextEra Energy Resources business and at the limited partnership, NextEra Energy Partners, both of which should contribute to earnings growth and support the dividend.
ServiceNow Inc. (NOW): ServiceNow provides cloud-based software-as-a-service management applications to automate and track workflows across an enterprise. The company markets industries ranging from Financial Services and Consumer to Healthcare and Technology. Subscription-based software offerings (84% of revenue) provide revenue predictability and support operating efficiency. ServiceNow’s offerings benefit from the secular trend away from the enterprise data center and toward enterprise digital transformation (enabled by its cloud software-as-a service model). ServiceNow’s scalable IT solutions provide value to customers by making IT services more manageable and efficient -- thus lowering the total cost of ownership. The stock was buffeted by the surprise resignation of its CEO along with profit-taking in appreciated software names; we regard any weakness as an opportunity to initiate or add to positions.
Twitter Inc. (TWTR): Twitter sees itself as a platform for public self-expression and conversation. The company now accommodates videos, music, sports events, games and other media content. TWTR plunged by 20% after a top-line miss in 3Q19 driven by product-related issues and seasonality. The company also announced plans to eliminate political advertising from its platform. We believe the subsequent modest rebound in the stock price reflects the healthy pace of daily active user (DAU) growth. Additionally, removing political advertising, while representing a near-term hit to revenue, is designed to improve the long-term health of the platform. We regard weakness in TWTR as a purchase opportunity.
Yahoo Finance Premium members: To view the full 30 stock Argus Focus List, as well as recent deletions, go to Research Reports and filter by Portfolio Ideas.