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Research Calls Send These Stocks Soaring

Palo Alto Networks, Google and Facebook find champions on the Street.
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Sometimes you can knock companies over with a feather. Other times they just dance when called upon by research. For example, today we got a couple of reports out of Piper Jaffray that lit a fire under a couple of companies. That reminds us that pent-up demand for good stocks remains among individuals and institutions.

And what an appetite there is.

Take the excellent initiation of Palo Alto Networks (PANW), which is by far my favorite play on network security. If you want to defend your company against advanced persistent threats, you need Palo Alto, which is one of the few security companies that actually have the capabilities to do so.

This is a remarkable company with a remarkable CEO that has the technology to keep up with the bad guys. Mark McLaughlin, the CEO, has the vision that companies need, particularly banks and department stores, to stay one step ahead of the Russian posse and all of the other threats. He has only scratched the surface of next-gen security, because it is a gigantic market, and you are talking about a company that is slated to do about $800 million in revenue next year. I think it will be much bigger than that, and that is why I agree with the $100 target.

Or how about Stifel resuming coverage of Google (GOOGL) with a Buy and a $700 target? All this piece of research does is re-state the Google case. Yet it is electrifying the Street, as the stock has underperformed despite putting up excellent numbers. I find this stuff extraordinary, as if Google has just been waiting in the wilderness for a new research firm to squawk about its greatness and its upside. The stock is up only 3% for the year, and it has been in search of a champion. Stifel is the champion.

Or how about Facebook (FB)? This stock has been acting terribly after a gigantic run. The price-to-earnings multiple represents about half of what I would expect. Then Stifel put a $95 price tag on the stock, and it is off to the races? Again, how can that be? The answer: timing. A languishing growth stock can really be propelled by the right push.

The research community periodically matters and matters big. And with the prospects of a possible diplomatic initiative in Russia and a sense that stocks have wallowed enough, these calls have these stocks flying.

These calls will breed more big calls and price targets. They always do. The sellers seem to be on vacation. The buyers are taking action. 

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long FB and GOOGL.