Traders are Optimistic About These Dividend Tech Stocks

Traders are Optimistic About These Dividend Tech Stocks

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Looking to invest in the technology sector? Enjoy dividend income? We created a stock list with these preferences in mind.

To create the two lists below we started with a universe of stocks in the technology sector with dividend yields north of 1.5%. Next, we looked for bullish sentiment from "smart money" traders.

In the first list we have 4 companies that have experienced significant levels of institutiuonal buying in the current quarter. This includes hedge funds and other big money mangers. 

Many investors watch institutional purchases very closely because they tend to house some of the smartest and most experienced traders with access to in-depth company analysis. So it’s considered a strong vote of confidence when they are collectively net purchasing a stock.

For the second list we looked among the dividend technology stock universe for short covering activity. Short sellers make money when share price falls, by "covering" their position they are retreating from their negative view, and signaling a belief that shares have more upside than downside to price in. 

Short sellers are usually sophisticated investors because they have to go through background and credit checks to be able to short a stock. Shorting requires using margin, which is a form of credit, so there is an added level of risk involved in shorting. If a short seller is covering, or buying back, their short position, then it’s safe to say that they think that the stock has reached what they think is its lower limit.

Business Section: Investing Ideas

Interactive chart of the 7 stocks listed below. Press "play" to see changes in dividend yield offered over the past two years:

First, the 4 dividend technology stocks with significant institutional buying:

 

1. ADTRAN Inc. (ADTN, Earnings, Analysts, Financials): Designs, manufactures, markets, and services network access solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Market cap at $1.31B, most recent closing price at $20.89. Dividend yield: 1.72%. Net institutional purchases in the current quarter at 8.6M shares, which represents about 13.82% of the company's float of 62.21M shares.
 

2. Garmin Ltd. (GRMN, Earnings, Analysts, Financials): Operates as a holding company and through its subsidiaries, designs, develops, manufactures, and markets global positioning system (GPS) enabled products and other navigation, communication, and information products worldwide. Market cap at $7.44B, most recent closing price at $38.16. Dividend yield: 4.72%. Net institutional purchases in the current quarter at 7.0M shares, which represents about 6.07% of the company's float of 115.27M shares.
 

3. Quality Systems Inc. (QSII, Earnings, Analysts, Financials): Develop and market health-care information systems. Market cap at $1.14B, most recent closing price at $19.14. Dividend yield: 3.66%. Net institutional purchases in the current quarter at 2.9M shares, which represents about 7.26% of the company's float of 39.96M shares.
 

4. Spreadtrum Communications Inc. (SPRD, Earnings, Analysts, Financials): Operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. Market cap at $739.91M, most recent closing price at $16.12. Dividend yield: 2.36%. Net institutional purchases in the current quarter at 6.0M shares, which represents about 17.26% of the company's float of 34.77M shares.
 

These 3 dividend technology stocks are experiencing significant short covering:

1. Lexmark International Inc. (LXK, Earnings, Analysts, Financials): Develops, manufactures, and supplies printing and imaging solutions for offices. Market cap at $1.54B, most recent closing price at $23.79. Dividend yield: 5.04%. Shares shorted have decreased from 15.63M to 14.35M over the last month, a decrease which represents about 2.03% of the company's float of 63.16M shares. Days to cover ratio at 9.65 days.
 

2. Seagate Technology PLC (STX, Earnings, Analysts, Financials): Designs, manufactures, markets, and sells hard disk drives for the enterprise, client compute, and client non-compute market applications in the United States and internationally. Market cap at $12.47B, most recent closing price at $34.74. Dividend yield: 4.38%. Shares shorted have decreased from 44.88M to 41.74M over the last month, a decrease which represents about 1.01% of the company's float of 309.68M shares. Days to cover ratio at 4.59 days.
 

3. Western Digital Corp. (WDC, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and sale of hard drives worldwide. Market cap at $11.6B, most recent closing price at $47.60. Dividend yield: 2.1%. Shares shorted have decreased from 12.41M to 10.06M over the last month, a decrease which represents about 1.09% of the company's float of 215.68M shares. Days to cover ratio at 2.46 days.
 

Interactive Chart: Compare average analyst ratings:

 

 

(List compiled by Rebecca Lipman)
 

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One Response to “Traders are Optimistic About These Dividend Tech Stocks”

  1. advanpro says:

    Short sellers make money when share price falls, by "covering" their position they are retreating from their negative view, and signaling a belief that shares have more upside than downside to price in.

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