Most investors prefer to follow the recommendations of analysts that receive a lot of attention, particularly analysts who work for leading financial institutions such as Goldman Sachs, Deutsche Bank and Credit Suisse (to name but a few). But financial bloggers also provide a valuable investing resource. Furthermore, the unregulated nature of blogging gives bloggers the freedom to write what they honestly think about a stock. In contrast, analysts are often constrained by the need to maintain valuable corporate relationships.
So, bearing this in mind, we decided to look for some top tech stocks favored by bloggers. We turned to the Nasdaq Smart Portfolio’s powerful stock screener which is a great source of investment inspiration. The screener allows investors to filter tickers according to a range of unique options, including blogger sentiment consensus based on data signals from over 6,100 bloggers. Here we set only three of the nine filter options:
This pulled up a list of about 10 stocks, from which we selected the following three tickers – all with strong blogger support. The best part is that if you click on the stock ticker you can find deeper stock analysis as well as links to articles from only the best online bloggers. These are the bloggers who outperform the market, whose stock recommendations have the highest success rate and average return. So now let’s see what these top-performing bloggers are saying about the following stock picks:
1. Microsoft (MSFT): Microsoft’s focused drive towards the cloud and artificial intelligence (AI) is certainly impressing the blogging community. This can be credited to the work of CEO Satya Nadella who took the helm in 2014. Top blogger Tom Taulli points out that during “Satya’s tenure, the shares have posted a return of over 200% — greatly outpacing other old-line tech operators.”
Taulli highlights the success of Microsoft’s cloud business, which is now the second biggest operator in the cloud market with 11% of spending vs Amazon’s 31%. However, according to Taulli, Microsoft has the potential to become the no.1 cloud business due to its extensive set of cloud applications and impressive Azure cloud computing platform. And this matters because Gartner research forecasts that the market will grow at an average compound annual rate of 18% to $383.5 billion by 2020.
This blogger has a strong track record on MSFT of 82% success rate and 13.7% average return across his 11 ratings on the stock. Overall, we can see below how 91% of bloggers are positive on the stock- way above the tech sector average.
2. AT&T (T): Interestingly, bloggers display a bullish sentiment on this telecommunications giant. In fact, 87% of the 79 blogger opinions on T are bullish and just 13% are bearish. The reason why this is so interesting is because AT&T is not having the best month with prices steadily creeping lower to just $37.86 (the current share price). Top blogger Josh Enomoto published his defense of the stock on August 24. He is ranked #526 out of 6,119 bloggers on TipRanks.
He says the market is nervous about the $40 billion AT&T will pay for cable TV company Time Warner. However, he concludes that ultimately this is the right move that will enable T to diversify from the crowded and increasingly competitive wireless space. And from a technical perspective, Enomoto holds that despite a “rather ugly” short term picture, “in the longer-term, T stock could be setting up a bullish revival.” Shares have been consolidating for almost three years, and the pent-up pressure could lead to an upward swing.
This will be reassuring to dividend investors because T is a top dividend stock pick. The company pays out a very high dividend yield of 5.1% which translates into a $0.49 dividend. Meanwhile analysts have a Moderate Buy analyst consensus rating on the stock with an average analyst price target that suggests 14% upside potential from the current share price.
3. Tencent (TCEHY): This Chinese internet giant is involved in so many different businesses it’s hard to keep count. Tencent Games, for example, is the world’s biggest online gaming company with revenue of over $10 billion. Tencent also founded WeBank, the world’s first online bank back in 2015, while WeChat is China’s most popular social messaging app with 928 million monthly active users. Alongside numerous other offerings, including virtual reality headsets, Tencent is also busy developing AI technology for its brand new driverless car alliance.
Bloggers seem to like Tencent’s approach- we can see here how it has a 100% bullish blogger consensus. Compare this to the much more muted tech sector average in the TipRanks graphic below. In particular, blogger Nicholas Ward wrote on August 21 that he has initiated a position in Tencent.
He says: “I like the fact that Tencent has been willing to take large stakes in growth companies as a means of diversification” but adds that “Tencent’s rising debt load is a bit concerning to me.” According to Morningstar, Tencent’s long-term debt is close to $95 billion. Ward is a top blogger to track -- he has a five-star rating for his stock picks with an impressive 70% success rate and 11.4% average return across his 121 ratings.
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