With much of the investment world focused on technology stocks Friday, Sean Udall, tech stock strategist and publisher of The Udall Report, was a guest on the PreMarket Prep Plus show.
Several technology stocks issues were covered during the segment, but this article will focus on two of Udall's long trading ideas.
Udall's Tech Ideas: The first one is Twitter Inc. TWTR, an issue we have both been bullish on for years. The issue has been falling out of favor, along with other social media stocks, and was crushed on Wednesday following a huge EPS miss and inline revenues.
Udall remains super bullish. He calls for much higher prices in the issue over the next 18 months.
“I think that conditions are getting better than worse for Twitter,” he said.
“The fallout from Facebook and other social media platforms is going to be a good thing for Twitter.”
Also, Udall was impressed with the 37%-40% revenue growth going against tough comps.
Udall concluded that the issue would be extremely attractive at the $48-$50 area.
The Twitter discussion from Friday’s PreMarket Prep Plus broadcast:
One of his top 20 names is Western Digital WDC, which was being pounded in Friday’s session, as its solid first-quarter beat on both ends was overshadowed by lower second-quarter guidance.
Udall first commented on the technicals.
“This is at an interesting Fibonacci level (50%), which may act as support,” he said.
Udall said of Western Digital's metrics: “They are not doing great in cash flow right now and they are still at $2 billion, and at peak, it could move up to $4 billion.”
Even at $3 billion in cash flow, Western Digital would have a cash flow yield of 18%-20%.
"I have never lost money buying a stock at those metrics," he said.
He mentioned $48 as an attractive entry point if the move lower continues.
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