As we head in to the final month of what has been a tremendous year for the stock market, the 24/7 staff is reviewing what the major Wall Street firms are recommending for the stretch run and into 2014. The third-quarter earnings season wrapped up in November with stocks providing solid earnings for the third quarter. The fourth quarter is expected to be solid again, if not spectacular.
The equity research team at Credit Suisse has updated their Top Picks list, which represents their top U.S. investment ideas. This mammoth list includes 143 top stock ideas. The new additions may be good ideas for investors looking to add stocks to their portfolios that are beginning to get wider coverage at top Wall Street firms like Credit Suisse. Here are some of the top new stocks added to the list with the highest upside potential to the Credit Suisse price target.
Alliant Techsystems Inc. (NYSE: ATK) makes its debut on the Credit Suisse list. The company recently delivered its 11th straight positive earnings surprise on solid revenue growth and expanding profit margins. Management also raised its full year sales and earnings guidance after the latest beat, prompting analysts to revise their estimates significantly higher for both 2014 and 2015. Investors receive a small 0.9% dividend. The Credits Suisse price target for the stock is $148. The Thomson/First Call estimate is $130. Alliant closed Tuesday at $120.39.
Ashland Inc. (NYSE: ASH) is the only basic materials name to be added to the list. The company is reportedly in discussion with at least seven private equity firms regarding the divestiture of its Water Technologies business unit, according to sources referred by Reuters. The transaction value of the deal could exceed $1.5 billion. Investors receive a 1.5% dividend. Credit Suisse has a $101 price target, and the consensus figure is at $103. Ashland closed Tuesday at $91.63.
Baxter International Inc. (NYSE: BAX) is one of five health care names added to the list. The company develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions. The company has increased the stock’s dividend for shareholders, which now stands at a yield of 2.9%. The Credit Suisse price target is $80, and the consensus is at $77.50. Baxter closed Tuesday at $67.35.
Estee Lauder Companies Inc. (NYSE: EL) is a new addition that may have a very solid holiday shopping season. One surprise to some investors could be Estee Lauder’s booming travel retail business. Rising air traffic is expected to boost sales in the Travel Retail segment in the upcoming quarters. The company also has witnessed a rise in online sales, which is impressive. Moreover, the company’s continuous product innovation helps it to maintain market share amid difficult conditions. Investors are paid a 1.1% dividend. The Credit Suisse price target is $82, while the consensus is at $78. The stock closed Tuesday at $74.49.
McKesson Corp. (NYSE: MCK) is another top health care name added to the Credit Suisse list. Although McKesson plays in the health care info tech space, the lion’s share of its revenue comes from pharmaceutical distribution. This is expected to be a large growth area going forward with an aging population. The stock was also raised to a Buy two weeks ago at Deutsche Bank. Investors receive a small 0.6% dividend. The Credit Suisse price target is $172, but the consensus number is slightly higher at $175. McKesson closed Tuesday at $163.87.
Ralph Lauren Corp. (NYSE: RL) is a top consumer discretionary name that also may be looking for solid holiday sales. With a strong second-quarter performance, the company raised its full-year forecast and increased its dividend payment by 12.5%. Ralph Lauren has been well-known for consistent cash return to shareholders via both share repurchases and dividend payments. In the second quarter, the company bought back around 285,000 shares at around $176 per share. In the future, it expects to utilize its remaining $427 million share repurchase authorization to provide returns to shareholders. Shareholders are paid a 1.0% dividend. Credit Suisse has a $197 price target for the stock, and the consensus estimate is at $197 as well. Ralph Lauren closed Tuesday at $173.15.
Vail Resorts Inc. (NYSE: MTN) is a new addition that is certainly hoping for a snowy holiday and winter season. The company, which is based in Broomfield, Colo., operates resorts in Colorado, Utah, Minnesota, Michigan, Wyoming and the Lake Tahoe area of California and Nevada. The resort in Vail was named one of Forbes top 10 Ski resorts for 2014. Investors receive a 1.1% dividend. Credit Suisse has an $81 price target, and the consensus is posted at $76. Vail closed Tuesday at $74.06.
Zimmer Holdings Inc. (NYSE: ZMH) rounds out the top new picks. The company sells orthopedic reconstructive, spinal and trauma devices, biologics, dental implants and related surgical products. In its most recently reported quarterly results, Zimmer had net sales of $1.07 billion. The company has one of the highest net operating margins in its field at 14.86%. Investors are paid a 0.9% dividend. The Credit Suisse price target is $100, and the consensus sits at $92.50. Zimmer closed Tuesday at $90.59.
Despite a very strong 2013, and a Wall Street general consensus of a solid year next year, 24/7 readers need to be wary of a correction. Plus, there will be crucial data on Friday that could be big market movers. We have stressed to be cautious as we head in to the new year. Once again, the politicians in Washington, D.C., will have to confront the budget and debt ceiling. This has proven to be a volatile issue in the past and should continue to be so in January.