While summer actually ends in September, the Wall Street summer comes to an end this week as traders will be out to the beach and vacation areas for one last time before the trading and activity gets back to normal levels. With the markets grinding back and forth during the past three months, it’s a good bet that everybody will be looking at portfolios for places to take profit and for companies that make sense for the rest of 2017.
A series of new reports from Jefferies look at some top large cap companies that show some value traits along with solid growth potential. It’s important for readers to remember that typically September and October can be the most volatile months, and we haven’t had a 5% correction since the summer of 2016.
Here are five top growth stocks with a value edge to Buy at Jefferies.
This integrated giant is a safer way for investors looking to stay or get long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.
The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas. Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.
The company reported solid earnings for the second quarter, and analysts have noted that the Permian Basin remains a key source of capital flexibility, and it is a key issue behind their relative preference for Chevron versus some of the other majors. Analysts also noted at the time that Permian production is running ahead of guidance, with implications on reducing sustaining capital for the broader portfolio. Major project starts, led by Gorgon continue to drive an inflection in free cash flow, with the cash breakeven trending below $50 by 2018.
Shareholders are paid a solid 4% dividend. The Jefferies price target for the stock is $135, and the Wall Street consensus price objective is $116.38. The shares closed trading on Monday at $107.76.
This is an online travel leader that is poised for a potential big 2017. Expedia Inc. (NASDAQ: EXPE) is the leading internet travel pure-play with exposure to online travel in the United States, Europe and Asia. The company’s portfolio of brands includes Expedia, Orbitz, HomeAway, Travelocity, Hotels.com, Trivago, Egencia, Hotwire, Wotif, Venere and Classic Vacations.
Top analysts see it as a story of improving execution, and they also think that the company is starting to finally match Priceline’s growth metrics. The company has raised its dividend and is buying back stock, both shareholder friendly actions.
Jefferies notes that the stock trades at a discount to its top rival, Priceline. The point is the stock trades at 10.5 times enterprise value/EBITDA, the lowest among large cap internet names and a 37% discount to Priceline.
Investors are paid a 0.85% dividend. Jefferies has a $180 target price, while the consensus target is $176. Expedia closed Monday at $142.53.