If there was ever a time to get an update on one of the top lists of stocks to buy on Wall Street that we cover here at 24/7 Wall Street, now may be it. The UBS quality growth at a reasonable price, or Q-GARP, list focuses on solid growth stocks that are inexpensive by the UBS standards and metrics, and with a pricey market, it is timely.
The list is constructed using an initial quantitative screen of stocks based on: 1) quality metrics — high and stable profitability, 2) growth — high expected earnings growth, and 3) valuation — low valuation relative to peers. The final list is a compilation of quality growth stocks that they believe are trading at attractive valuations.
Here are the new stocks added to the list, and an update on some of the other quality names the firm is recommending.
Cognizant Technology Solutions Corp. (NASDAQ: CTSH) makes its debut on the Q-GARP list, and it is a favorite name at many Wall Street firms. The company provides information technology (IT), consulting and business process outsourcing services worldwide. The company operates through four segments: Financial Services; Healthcare; Manufacturing, Retail, and Logistics; and Other. It offers consulting and technology services, such as IT strategy, program management, operations improvement, strategy, and business consulting services. The Thomson/First Call price target for this top tech name is at $56.20. Cognizant closed Monday at $47.77 a share.
ICON PLC (NASDAQ: ICLR) also is added to the UBS list. The company is a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries. The company specializes in the strategic development, management and analysis of programs that support clinical development, from compound selection to Phase 1 to 4 clinical studies. It literally is the support research and development team for many top biotech and biopharma companies. The consensus price target for the stock is $50.50. ICON closed Monday at $45.39.
Here are updates on other Q-GARP stocks to buy that have made recent headlines.
Allergan Inc. (NYSE: AGN) is a top name in the health care sector and remains a source of controversy as activist investor Bill Ackman and Valeant Pharmaceuticals takeover bid continues the hot pursuit of the company. The company reported solid earnings, and a host of Wall Street firms lifted their ratings on the stock before the takeover bid. The company benefits from one of the strongest balance sheets among its peers and a stable revenue base from established drugs.
Many Wall Street analysts, including UBS, think Allergan investors should see double-digit annual growth through 2018 from a couple of key products: Botox injections and the eye treatment Restasis. Investors are paid a small 0.1% dividend. The consensus price target is $187.60. The stock closed Monday at $159.37.