With a deluge of second-quarter earnings about to hit the tape, many investors are not only looking to see what the results are, but also very focused on guidance on this quarter and for the rest of 2017. With an eight-year-old bull market growing long in the tooth, it makes sense to tread lightly. The market has posted only five declines steeper than 1% in the past year, that’s the fewest for a 12-month period since 1996.
At 24/7 Wall St. we think it’s always a good idea to look at the highest conviction picks at the firms we cover for ideas going forward. Typically these are companies where the research is extremely thorough, and the stocks are shown to the top clients. We found four companies on the Wedbush Best Idea List that should be great stocks to own through the balance of 2017. All are rated Overweight.
This company remains a top pick on Wall Street. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide. It develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers.
Some analysts feel the company could earn up to $3 per share by 2018 if it can optimize the King Digital advertising opportunities and unlock synergies. Advertising in the company’s Candy Crush franchise has posted a solid start.
The key drivers for the company include the planned launches of “Call of Duty: WWII” (November 3 release date), for which management is already guiding to sales growth for the franchise in the fourth quarter, and “Destiny 2,” which is scheduled to debut September 8.
Shareholders receive a small 0.50% dividend. The Wedbush price target for the shares is $63, and the Wall Street consensus target is $62.17. The stock closed Thursday at $60.50.
This company has long been mentioned as a potential takeover candidate. Proofpoint Inc. (NASDAQ: PFPT) provides threat protection, incident response, regulatory compliance, archiving, governance, eDiscovery and secure communication solutions worldwide. Its security-as-a-service solutions comprise an integrated suite of on-demand data protection solutions that enable large and midsized organizations to defend, protect, archive and govern their sensitive data.
The company provides Proofpoint Enterprise Protection, a communications and collaboration security suite designed to protect customers’ mission-critical messaging infrastructure from outside threats, including spam, phishing, unpredictable email volumes, malware and other forms of objectionable or dangerous content before they reach the enterprise.
Wedbush has a $93 price target. The consensus target is $93.60, and shares closed trading Thursday at $87.22.
Royal Caribbean Cruises
This company looks solid as many people, especially the baby boomer crowd, continue to take expensive cruises.
Royal Caribbean Cruises Ltd. (NYSE: RCL) operates cruises under various brand names. The Royal Caribbean International brand provides cruise itineraries ranging from two to 24 nights, with options for onboard dining, entertainment and other onboard activities to various destinations.
The Celebrity Cruises brand offers cruise itineraries ranging from two to 18 nights to various destinations, and it operates onboard upscale ships that offer accommodations, fine dining, personalized services and spa facilities. The Azamara Club Cruises brand offers cruise itineraries ranging from three to 20 nights that serve the upmarket segment of the North American, the United Kingdom and Australian markets.
The Pullmantur brand provides cruise itineraries ranging from two to 15 nights, with food and entertainment options for families and couples. The CDF Croisières de France brand offers seasonal itineraries to the Mediterranean, Europe and Caribbean markets. The TUI Cruises brand provides onboard activities, services, shore excursions and menu offerings for the German cruise market.
Shareholders receive a 1.76% dividend. Wedbush has set its price target at $117 and the consensus target is $118.50. The shares closed Thursday at $109.55.
This very aggressive tech play could have upside beyond the Wedbush target. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several games on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.
The company’s first-quarter results in May were highlighted by increased daily active users and monthly unique payers on stronger live services engagement. With live events growing revenues, cost cutting should drive margin expansion, which is very positive. The company also pops up in takeover chatter, and the low price makes it even more attractive.
The $4.25 Wedbush price target compares with the consensus target of $3.85. The stock closed on Thursday at $3.56.
These four stocks from the Best Ideas List at Wedbush offer varying degrees of risk and upside. The fact that they are not crowded momentum plays makes them far more attractive for the rest of 2017.