UBS Top Picks for Second Quarter for 25 Percent Gains (ALXN, ACI, C, CIE, DAL, HAL, BLOX, KRA, MNST, NCT, ROST, TIBX, WCRX, WFM)
When we started off 2013, most of the Wall St. firms we follow put out their top stock picks for the year. We covered those various lists so our readers could get an idea which way research analysts were leaning as the year began.
After an impressive first quarter, many firms are reevaluating their top picks. In a new report, the equity analysts at UBS A.G. (NYSE: UBS) not only have a list of stocks to buy, they have a list where they think there is 25% upside potential from current levels. In their report, each investment idea includes an investment thesis, current valuation as well as upside/downside scenarios, and risks.
With markets hitting all-time highs, we were somewhat surprised to find a list of stocks that a bulge bracket firm had enough confidence in to call for a sizable upside move from here. UBS definitely stepped up to the plate. A total of 14 names make up their list of stocks to buy with 25% upside potential.
Biopharmaceutical firm Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) leads off the list. It specializes in therapeutic products designed to treat blood disorders. Alexion stock had a nice bounce off a mid-February low and looks poised to move higher. The UBS price target is $122. The Thomson/First Call estimate is $119.
A stock we covered recently, former high flyer Arch Coal Inc. (NYSE: ACI) could have big potential for investors. Trading in the mid-$5 range, down from the high $70s in 2008, this out-of-favor name also could have nice upside. The UBS target is $9, and the Wall St. consensus price target is $7.75.
Money center leader Citigroup Inc. (NYSE: C) tops the financials on the UBS list. Their price target for the bank is $62, while the consensus is much lower at $51.30.
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Mid-cap, Gulf of Mexico deepwater driller Cobalt International Energy Inc. (NYSE: CIE) is a growing favorite on Wall St. and a top pick at UBS. Their price target for the stock is $36. The consensus estimate is slightly higher at $38.
Atlanta-based air carrier Delta Air Lines Inc. (NYSE: DAL) is the only transport to make the UBS list. Their price target for the stock is $21. The consensus target is $18.
Oilfield services giant Halliburton Co. (NYSE: HAL) makes the cut. Seemingly out of favor, despite strong crude oil pricing, this one looks like a solid pick. The UBS price target is $53. The consensus price target is $48.
A recent IPO in 2012, mid-cap software stock Infoblox (NYSE: BLOX) may have strong upside potential. It is run by former NetScreen executives. The UBS price target is $27 and the consensus estimate is $25.50.
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Houston-based Kraton Performance Polymers Inc. (NYSE: KRA) is a lesser known name to make the grade. The UBS price target for the stock is $32, versus a consensus price target of $28.
Controversial Monster Beverage Corp. (NASDAQ: MNST) finds a spot on the UBS list. The energy drink maker has come under fire, as health issues have been cited as a possible need for product regulation. The UBS target for the stock is $69. The consensus estimate is substantially lower at $61.
Structured as a REIT, Newcastle Investment Corp. (NYSE: NCT) is a solid income candidate for investors. The UBS target for the stock is $14. The consensus is $11.50. Investors are paid a 7.90% distribution. We always like to remind readers that REIT distributions may include return of principal.
Off-price retailer Ross Stores Inc. (NASDAQ: ROST) is another Wall St. darling. The UBS price target for this popular name is $75. The consensus is much lower at $66.
The only other tech stock to make the list is TIBCO Software Inc. (NASDAQ: TIBX). The stock has had a miserable year and is trading just above a 52-week low. The UBS target for this bounce-back candidate is $28. The consensus estimate is $24.
Specialty pharmaceutical company Warner Chilcott PLC (NASDAQ: WCRX) may be another bounce-back winner for investors. It is down more than 40% since last May, and the UBS price target for the stock is $23. The consensus estimate is $19.
Last but not least, natural and organic supermarket giant Whole Foods Market Inc. (NASDAQ: WFM) rounds out the UBS second-quarter top stocks to buy list. The firm has a $111 target for this Wall St. favorite. The consensus estimate is $103.50.
The UBS team has done a solid job of screening for names that are not all trading at their 52-week highs. We have reported at great length how the market has potential for a solid shift to secular bull market status. However, investors still need to be cautious when picking individual stocks for their portfolio after such a strong move to the upside.