3 tech stocks that soared last week

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3 Tech Stocks That Soared Last Week

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VirnetX, Universal Display, and Ambarella soared in a generally quiet market week. Here's how.

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Page 1: 3 Tech Stocks That Soared Last Week

3 Tech Stocks That

Soared Last Week

Page 2: 3 Tech Stocks That Soared Last Week

These 3 tech tickers beat the market, June 23 – June 27

Page 3: 3 Tech Stocks That Soared Last Week

VirnetX gained 7.3%, thanks to a big Tuesday surge.

Page 4: 3 Tech Stocks That Soared Last Week

The big move: • VirnetX enjoyed a massive volume spike on Tuesday morning.

• In the span of just one hour, more than twice the stock’s

average daily volume had shifted hands, driving share prices drastically higher.

• Somebody is creating a big position in VirnetX right here, or adding to an existing one.

• The stock is a popular component in small-cap and growth mutual funds.

• Still, only 55% of VirnetX’s float is held by insiders and institutions, leaving a large portion in the hands of retail investors.

Page 5: 3 Tech Stocks That Soared Last Week

Okay, but why the big buy-in? • This surge appears to be a delayed reaction to an earlier

favorable patent review decision.

• The U.S. Patent and Trademark Office denied all seven petitions by RPX Corporation to review four of VirnetX’s wireless security patents.

• The USPTO noted that Apple is a common denominator between all of RPX’s review filings, being sued for using all of the relevant patents.

• Apple’s own petitions have already been denied. Using middle-men to try again is a big no-no.

• Moreover, the time limits for starting these patent reviews have already expired.

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The big VirnetX takeaway: • Apple lost one effective tool in the VirnetX patent battles, but the appeals process

continues.

• The stakes are high, as VirnetX seeks billion-dollar payouts but is not likely to survive if the legal tide turns against the company.

• The final outcome of Apple’s defense will be cited and followed in other patent conflicts. This battle is setting the tone for the entire war.

• Right now, VirnetX looks like a winner. The question is, how far will Apple push its legal options? This is the kind of bellwether conflict that can go all the way to the Supreme Court.

• VirnetX is sitting pretty right now but the stock remains risky. Investors are betting on a long string of perfect outcomes, none of which are guaranteed.

• One bad day in court could bring the whole enterprise to its knees. Please be careful with this poker chip of a stock.

Page 7: 3 Tech Stocks That Soared Last Week

Ambarella surged sky-high on Tuesday. The excitement faded a bit, but the stock still had a great week.

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What happened on Tuesday?

• Ambarella makes the video processing chips at the heart of GoPro cameras.

• GoPro’s wild IPO also drove huge interest in Ambarella and other stocks with GoPro connections.

• Moreover, Google just bought Dropcam. The video camera space is simply red-hot right now, which is great news for components suppliers like Ambarella.

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There’s more to the Ambarella story • Ambarella might sound like a flash in the pan,

but don’t write it off too quickly.

• The company is showing positive earnings and cash flows, along with 20% annual sales growth.

• On Ambarella’s balance sheet, you’ll find $156 million of cash reserves but no debt.

• GoPro may be the richest feather in Ambarella’s cap, but the company is set up to thrive even if its target market sags for a while.

Page 10: 3 Tech Stocks That Soared Last Week

Finally, Universal Display gained 6.3% for the week. That includes an 8% jump on Friday.

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Universal Display’s catalyst • Universal Display rose as big-name analyst firm

Goldman Sachs reiterated its “buy” rating on the stock.

• Goldman analyst Brian Lee also raised his target price from $42 to $44 per share.

• The stock currently trades near $31.25, including the analyst note’s self-fulfilling prophecy powers, leaving lots of growth to do before hitting Goldman’s new target.

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What does Goldman see in this stock? “We believe OLED is one the more underappreciated product cycle stories in our coverage, with new product and customer-driven catalysts lining up to drive stock outperformance [in the second half of 2014].” said Lee. He likes Universal Display’s product pipeline, but the stock is also positioned for big gains in the near term. Lee provided 3 main reasons why: • Investor sentiment is too negative on this stock.

• Shares are attractively valued today.

• As the market for OLED product moves into the mainstream,

Universal Display is executing crisply on new business opportunities.

Page 13: 3 Tech Stocks That Soared Last Week

Apple hopes to sell millions of iWatches…

but not without this small-cap components supplier.