With the Memorial Day weekend and the unofficial start to summer right around the corner, many investors are thinking about vacations instead of which top stocks to buy, and after one of the most volatile trading weeks in the past year, it makes sense to take a breather and look for some new opportunities. With stocks priced almost to perfection, it may be smart to shift to companies that have better upside potential.
We screened the Jefferies top stock calls for this week, and found four that fit the bill perfectly as candidates that could be set for a significant move higher. All are rated as Buy, and all are more suited for aggressive growth accounts.
This company used to be owned by General Motors and is one the newest additions to the Jefferies Franchise Picks portfolio. Delphi Automotive PLC (NYSE: DLPH) is a global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company is one of the most geographically diversified suppliers in the world, with a goal of generating an equal portion of sales from North America, Europe, Asia and the rest of the world.
Jefferies cites the 30% growth of advanced driver assistance systems for autonomous vehicles, which provides safety at a moderate cost. A recent report noted this:
Delphi is the global Electrical/Electronic Architecture (E/EA) leader with 25% market share (55% annual revs). The growing need for vehicle complexity management (wiring/cabling +50% since 2012) suggests E/EA is nearing an inflection point (and is undervalued). Original equipment manufacturers will be more inclined to rely on the company’s expertise in a segment increasingly intertwined with both complex hardware (cabling, wiring, harnesses etc.) and software (Multi-domain, SoC) needs.
Delphi shareholders are paid a 1.35% dividend. The Jefferies price target for the shares was recently raised to $106 from $100. The Wall Street consensus target is set at $98.10, and the stock closed Monday’s trading at $87.10 per share.
The Jefferies team says investors should stand their ground on this company. Exact Sciences Corp. (NASDAQ: EXAS) is a molecular diagnostics company that is focused on the early detection and prevention of the deadliest forms of cancer. The company has exclusive intellectual property protecting its noninvasive, molecular screening technology for the detection of colorectal cancer. Cologuard is included in the colorectal cancer screening guidelines of the American Cancer Society, and stool DNA is included in the U.S. Multi-Society Task Force on Colorectal Cancer.
The stock was hit hard last week, and the Jefferies team noted this in the report:
The stock was the target of a short report recently, which we believe was consistent with the outstanding bearish view. We see Cologuard tracking to >$200M in 2017 revenue currently, which barely accounts for recent guideline and payor wins. We also note the company has secured positive coverage for ~197 million lives and that S&M/test fell 40% year-over-year in the first quarter. Further, though the Protecting Access to Medicare Act could reduce CMS reimbursements, this is limited to 10% per year through 2020. We’re buyers on weakness, continue to look for 15% long term revenue growth.
Jefferies has a price target for the shares of $35, and the posted consensus target price is $35.25. The stock closed most recently at $31.80 per share.