Keysight Technologies Inc. (KEYS)

(A Top Pick March 27/17. Up 22%.) This was originally Hewlett-Packard and is the original test equipment business. Very well positioned, because we have a cycle coming in communications and equipment from 5G wireless, which is just starting the ramp up of the R&D now. Also well positioned with defence electronics.

This does both hardware and software that allows other companies to test and design electronic components. The world is becoming more and more technology and electronic component intensive. Often you get companies that don't feel the love in terms of capital allocation priorities or management time. This kind of stagnated for a while. 5G and electric vehicles are a big trend and are kind of getting into software. Between the 3 of them, she expects this to do pretty well. (Analysts' price target is $50.)

Makes electronic test equipment. This is Hewlett-Packard, but without the printers, medical equipment or computers. It’s the business Hewlett-Packard founded in their garage back in the 1930s, which really invented the whole category of electronic tests. This is a good opportunity and timely because 5G wireless is coming. If you want to develop and deploy 5G wireless, you need to deal with one of a small group of companies, Tektronix, Roddy and Schwartz and Ritzy (?), but he likes Keysight the best. They have a significant defence segment, and thinks it can be a higher component of their revenues. They are better at detecting RF (radio frequency) emissions than anyone else, and have their own semiconductor foundry where they make the chips. (Analysts’ price target is $50.)

(A Top Pick March 27/17. Up 14.4%.) The original Hewlett-Packard business. They provide electronic test equipment. It is going to be impossible to deploy 5G wireless without paying them. They have really solid margins and can do 20% over a full cycle.

A great play on the 5G wireless cycle as well as the testing of defence electronics. They also have a business where they can’t tell anybody what they do. (Analysts’ price target is $48.)

They do software and hardware tests on electronic components, to make sure they actually work. You can’t design anything without what they do. 50% of their revenue is in some kind of recurring nature. There are some big secular trends that are positive such as 5G deployment and Smart Cars which need electronics. (Analysts’ price target is $48.)

The original Hewlett-Packard. There is a certain amount of value created by unleashing a management from being within a conglomerate that ties their hands-on capital allocation decisions. This is a leader in electronic test equipment. It is very difficult to design ships or to develop and deploy communication networks without using their equipment. The transition to 5G wireless is a major catalyst for them. (Analysts’ price target is $47.)

It is the original HP, started in 1939. All the other pieces of HP have been spun off from this. It is the original test electronics. You have a significant increase in defense electronics spending coming. You have 5G wireless coming. There is a limited list of companies you can go to as an alternative. It is a very consolidated industry. 20% operating margin. (Analysts’ target: $39.00).