Small & Mid-Cap Stocks With 50% Upside In 2012 (OIS, OI, ROSE, WBC, CIE)
In December you get to see all sorts of predictions and stock picks from market pundits for the year ahead. This year is no different, and Credit Suisse has issued this month its list of Small Cap Stocking Stuffers. In the heart of the small-cap and mid-cap universe, called the SMID, Credit Suisse had ten new additions and the total group was twenty-four stocks. We pulled those with the most implied upside and the following had implied upside of close to 50% or more in the year ahead: Oil States International Inc. (NYSE: OIS); Owens-Illinois, Inc. (NYSE: OI); Rosetta Resources, Inc. (NASDAQ: ROSE); and WABCO Holdings Inc. (NYSE: WBC). Cobalt International Energy, Inc. (NYSE: CIE) is a “runner-up” only now because it has outperformed the market so much this month.
We have shown how Credit Suisse’s price targets compare to the consensus targets and shown price history as well to give investors a feel for what the price targets might imply. Other color has been added in if applicable.
Oil States International Inc. (NYSE: OIS) is in the Energy Equipment & Services sector. Credit Suisse’s Arun Jayaram has an Outperform rating on the stock and it has been on the top picks list since September under the growth category. Shares are trading at $75.00 and the $110.00 price target objective implies upside of almost 47%. Thomson Reuters has a $95.92 consensus price target on Oil States and Credit Suisse has the “street high” target. It should be worth noting that shares tanked in the summer sell-off and they have now recovered actually by about 50% since the September-October selling climax.
Owens-Illinois, Inc. (NYSE: OI) is in the Metal and Glass Containers sector and Credit Suisse’s Al Kabili has an Outperform rating and it is listed as a value stock. This stock was added to the top picks list in mid-December. At $18.65, there is an implied upside of almost 61% to the firm’s $30.00 price target. Interestingly enough, the consensus price target from Thomson Reuters is $28.11 and the highest target from other analysts is $32.00. It looks like there are still many bullish analysts here on this one outside of Credit Suisse. The summer sell-off was brutal here as shares were more than cut in half at the extreme point before recovering recently.
Rosetta Resources, Inc. (NASDAQ: ROSE) is in the Oil and Gas Exploration and Production segment. Credit Suisse’s Mark Lear has an Outperform rating and calls ita growth stock. At $44.00, there is an implied upside of 52% to the firm’s $67.00 price target. The Thomson Reuters consensus price target is $58.64 and the year high is $58.04. There are some other analysts with far higher expectations as there is one price target as high as $82.00 on the stock. This one has been an aggressive earnings growth name and that is expected to remain in 2012.
WABCO Holdings Inc. (NYSE: WBC) is into braking, stability, suspension, and transmission control systems primarily for commercial vehicles. Credit Suisse’s Peter Chang has an Outperform rating on Wabco as a growth stock. The $43.00 share price today leaves an implied 53% upside to the firm’s $66.00 price target. This one has been very volatile as the 52-week range is $34.17 to $75.00. Credit Suisse is only a tad more bullish than the consensus as Thomson Reuters has a median price target of $63.71 and the highest analyst price target is $71.00.
Cobalt International Energy, Inc. (NYSE: CIE) is now just a “runner-up” in the Oil and Gas Exploration and Production segment and Credit Suisse’s Edward Westlake has an Outperform rating. This one was added as a fresh addition to the top picks list in December, but investors have effectively missed this one. It had 50% implied upside to the $17.00 price target at the time, but now shares have risen to $15.98. If it matters, Thomson Reuters has a higher consensus price target of $18.40 on the stock.
JON C. OGG