UBS has updated its Tech 10 portfolio by adding semi-packaging/assembly equipment provider ASM Technologies as a least preferred stock. Tech 10 is a market-neutral basket of the five most and five least preferred global equities.
Since its inception on Dec. 9, 2008, the Tech 10 Portfolio has held 103 stocks, including 44 most preferred and 59 least preferred. Of the 44 most preferred, 26 advanced and 18 declined while on the list. Of the 59 least preferred, 23 moved lower (added value) and 36 moved higher (lost value) while on the list.
The Tech 10 portfolio is up 16.0 percent year-to-date, versus a 3.1 percent decline in the HFRI Equity Market Neutral Index. Since its inception, the Tech 10 is up 67.4 percent versus a 5.9 percent HFRIEMN decline.
We prefer a mix of firms that can benefit from troughing cycle trends (KLA, Micron), secular growth in security/mobility (Check Point, Qualcomm), and strength in emerging/IT (Synnex) over names with less compelling risk/reward, increased competition, and fewer near-term catalysts (ASMPT, Citrix, CSC, Gemalto, Nvidia), analyst Nikos Theodosopoulos wrote in a note to clients.
Following is a brief profile of the Tech 10 stocks:
Five Most Preferred:
Check Point Software Technologies (NASDAQ: CHKP): The Tel Aviv, Israel-based company develops, markets and supports a range of software and combined hardware and software products and services for information technology (IT) security applications worldwide.
KLA-Tencor Corp (NASDAQ:KLAC): California-based KLA-Tencor offers process control and yield management solutions for the semiconductor and related nanoelectronics industries. It offers equipment comprising wafer and integrated circuit (IC) defect monitoring, review and classification and reticle defect inspection and metrology.
Micron Technology, Inc. (NASDAQ:MU): Boise, Idaho-based Micron Technology makes Dynamic Random Access Memory (DRAM) products, including DDR2 and DDR3 for use as main system memory in computers and servers. The company also offers NAND flash memory products, including RealSSD solid-state drives, flash memory cards, CompactFlash and memory stick products and SD memory cards.
Qualcomm, Inc. (NASDAQ:QCOM): California-based Qualcomm makes digital wireless telecommunications products and services, including code division multiple access (CDMA) based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning system products.
Synnex Technology International: Taiwan-based Synnex distributes computers, integrated circuits, wireless phones and a host of other high-tech items under more than 270 international brands, including Ericsson, Hewlett-Packard, Intel, Microsoft and Nokia.
Five Least Preferred:
ASM Pacific Technology is a leading assembly and packaging equipment supplier. The company makes and markets equipment and lead frames used in microelectronics and semiconductor industries.
Citrix Systems (NASDAQ:CTXS): The Florida-based company offers desktop solutions, including Citrix XenDesktop, an integrated desktop virtualization system; Citrix XenApp, an application virtualization solution; and Citrix XenClient, a bare-metal hypervisor, which runs directly on the client device hardware.
Computer Sciences Corp. (NYSE:CSC): Virginia-based CSC is a leading provider of systems integration and other information technology services. The company's services include application development, data center management, communications and networking development. It also provides Business Process Outsourcing services such as customer relationship management, billing and payment processing and human resources.
Gemalto: The company offers digital security products and services such as contactless payment cards, electronic passports, smart cards and card readers, subscriber identification modules (SIMs) and universal integrated circuit cards (UICCs) in mobile phones.
Nvidia Corp. (NASDAQ:NVDA): California-based Nvidia makes graphic chips that are deployed by many PCs, smartphones and tablets. The company's flagship GeForce line, is used by leading PC makers, such as Apple, Dell and Hewlett-Packard.