A lot of good news for the overall stock market last week, resulting in an explosive move to the upside for all of the major indexes after Fed Chairperson Janet Yellen’s remarks on Wednesday.  After getting off to a rough start on Monday, the net result for the week was a solid gain of almost 3% in the Nasdaq Composite Index, reflecting a very positive outcome to several weeks of ennui over declining oil prices.

Although oil was the primary topic of discussion, tech stocks actually led the market higher with Oracle (NYSE: ORCL) leading the way. On Wednesday the company announced that cloud revenue increased by 45% to $516 million during its second fiscal quarter, blowing away analysts estimates and establishing it as a dominant player in the rapidly growing segment.

The reaction in the share price of its stock was immediate, jumping 10% in a matter of minutes before settling around $45. Had that jump been factored into the one year performance of our Investments Portfolio its outperformance over the Nasdaq Composite Index would have been even more pronounced, proving once again that our theory of innogration continues to pay off across the board.

 But Oracle is not the only Investments Portfolio holding trouncing the market recently; Western Digital (NSDQ: WDC) enjoyed a 5% jump in value on Wednesday after Citi raised its price target on its stock to $125. When we first added WDC to our portfolio a year ago it was trading a little over $80, and as recently as October was briefly below $85 during the Ebola-panic correction that was over as quickly as it started.

Our dilemma with both of these stocks is this: They – along with Intel (NSDQ: INTC) – have run up so much in value recently that their Smart Tech Rating scores are now less than the sector average, suggesting they are fully valued at the moment. We still like both companies from a long term perspective but have placed all three on ‘HOLD’ until their STR scores are able to catch up with their higher values.

Meanwhile, Micron (NSDQ: MU) has quietly snuck up our STR rating table, now sporting the fourth highest score of the fifty companies we rate. For that reason we are now adding it to the Investments Portfolio with a buy limit of $38, and a stop loss price of $28. We’ll talk more about it in the January edition of STI, but go ahead and it to your portfolio now if you don’t already own it.

Our Next Wave Portfolio has also had a lot of good news lately, as NICE Systems (NSDQ: NICE) has bolted up the charts over the last two months from $40 to $50 – a tidy little gain of 25%! Back in May I named NICE as my top tech stock recommendation at Investing Daily’s Wealth Summit, so I’m very happy to see it panning out so well (you can view that presentation – all 50 minutes of it – on the STI website if you’d like to hear a full explanation of how our innogration model works).

Even more impressive is the performance of some of Rob DeFrancesco’s recent Next Wave picks, including Varonis Systems (NSDQ: VRNS) up more than 20% since being added to the portfolio on November 17^th.  And it was only last week that Rob named FireEye (NSDQ: FEYE) as our picks as “The One Tech Stock to Own in 2015” when it was trading around $28; one week later and it is already more than 15% higher!

What’s my point? Knowing which tech stocks to buy can make a big difference in your portfolio returns. Even though the sector as a whole is doing well which may induce some investors to simply buy an index fund, last year our portfolio outperformed the index by almost 50%. This is not a fluke or the result of good luck. Leo, Rob and I take a very structured approach to identifying value and filter our portfolios down to only a handful of great stocks that meet all of our requirements.

Speaking of great companies, in today’s issue Rob has an update on Next Wave portfolio holding Teradata, which we first recommended back on May 20^th when the stock was trading just under $41. Now a little over $44, we still like it and believe there is still plenty of upside potential left in it.

NASDAQ Composite Index:                                                                        

Friday, December 19 = 4,765.38                                             

Year to Date = + 15.0%                                                  

Trailing 7 Days = + 2.7%                                      

Trailing 4 Weeks = – 0.6%

Next Wave Portfolio Update—Teradata Embraces Hadoop

By Rob DeFrancesco

Teradata (TDC) is getting bigger in Big Data. Last week, the company purchased privately held RainStor, a provider of online archiving solutions on Hadoop, the open-source software framework for distributed storage and processing of large data sets.

For 2015, Hadoop technology should become much more mainstream, as a greater number of organizations look to purchase the best solutions to help maximize bottom-line results from their Big Data initiatives.

The RainStor deal, Teradata’s fourth Hadoop-related analytics acquisition in the past six months, strengthens the company’s enterprise-grade Hadoop portfolio in a move to enable customers to improve archival data store capabilities and ultimately derive meaningful value from all of their data.

A variety of organizations (from the world’s largest banks to telecom service providers) deploy RainStor archive solutions, which provide efficient scale and fast query using a variety of tools and built-in security features. RainStor’s platform is lauded for being cost efficient (infrastructure costs cut by as much as 90% in some cases), easy to deploy and simple to manage.

Teradata in July purchased the assets of Hadapt and Revelytix, two smaller Big Data players. Hadapt software is used to integrate programming languages in Hadoop, while Revelytix’s metadata management system (called Loom) helps get various data sets quickly prepared for analytics.

Purchased in September, Think Big Analytics is a provider of Hadoop-related consulting services. With Think Big’s expertise, Teradata is now better able to advise customers on the best ways to leverage diverse Big Data technologies, according to Teradata CEO Mike Koehler. Think Big consulting teams can manage the entire Hadoop and Big Data deployment process—including initial assessments, building a strategic roadmap, designing an effective architecture and implementing the solution.

In October, Teradata debuted Teradata Cloud for Hadoop, an integrated on-demand offering that makes it easier for customers to get started using Hadoop for exploratory analytics. The new offering includes the company’s Viewpoint management console for advanced system monitoring, along with optional tools for the loading of bi-directional data movement between Teradata solutions and Hadoop.

Customers interested in using Hadoop to perform analytics and drive better business decision-making can access Teradata Cloud for Hadoop on their own. In addition, Teradata offers consulting expertise for Hadoop assessment, mentoring, training and security. For full end-to-end Hadoop support, customers can select Teradata Managed Services.

Teradata sees a lot of opportunity in expanding Hadoop usage across its installed base because customer interest in Big Data analytics is on the rise. Users are increasingly aware of the benefits of analytics (especially anything done in real time), particularly when the results provide a revenue boost along with expense reductions.

Teradata generates the bulk of its revenue from these five verticals: financial services (31% of 2013 revenue), communications (19%), retail (14%), manufacturing (13%) and healthcare (8%). All of these industries are prime candidates to increase usage of Hadoop for analytics endeavors.

Teradata has plenty of room for expansion, as its overall data warehousing penetration rates remain low in the following key verticals across Global 3000 companies: healthcare (26%), retail (23%), media/entertainment (16%), financial/insurance (16%), travel/transportation (15%), manufacturing (7%) and energy/utilities (4%).

For 2015, the Teradata consensus revenue estimate of $2.85 billion indicates growth of 3.7%. Recently trading at $44.30, Teradata shares have a forward P/E of 14.7 on the 2015 consensus EPS estimate of $3.01. Over the past six months, this forward P/E has ranged from 12.8 to 15.

Teradata last week raised its share buyback by $300 million, expanding the total buyback authorization to $450 million, representing 6.6% of the recent market cap of $6.78 billion.

Teradata remains a ‘Buy’ in the Next Wave Portfolio up to $45.