Analyst Explains Why He Loves Salesforce And Fiserv

Benzinga recently spoke with Federico Flom, MBA, analyst at StarBreakouts, who said "one of the most compelling technology plays in the market" is salesforce.com, inc. CRM. He said the stock has the potential to generate more than 25 percent upside in the next two months.

"Salesforce is the leader in a diverse set of cloud services," he expounded. "After several years of exciting high-growth, the company is turning into a more mature tech business with less erratic growth and more attention towards creating profits and sustained profitability."

The expert noted that the shares have been trading in a ~15 percent range over the past six months, adding that he believes that "the recent earnings report, which surprised consensus estimates and included a strong guidance for both FY16 and FY17, can make the stock start to move higher again with considerable volume."

"This is a leading company, in a growing industry that has been experiencing double-digit growth rates in the past quarters in terms of revenue and EPS growth," he concluded.

The analyst then went into Fiserv Inc FISV, which recently announced the buyback of 15 million shares. "I expect FISV to break a key $97 level and move higher from there," the expert stated. "Fiserv is a high quality stock that reported strong earnings in the recent report, raising 'guidance for FY15, projecting EPS of $3.84-$3.87 vs. prior outlook of $3.73-$3.83 and vs. $3.82 Capital IQ Consensus Estimate.

There are three key catalysts: "a high quality company in terms of fundamentals, a recently announced buyback and the latest earnings report which surprised expectations."

"The stock has been moving in a very tight range despite the recent market weakness. I believe that if FISV moves above $97 with strong volume, the stock may start to move higher consistently, offering a potential return of 10% in less than 2 months according to my models," he ended.

Disclosure 1: Federico Flom is long Fiserv (FISV)