Ten Top Large Cap Stocks to Buy With the Most Upside Potential
When we screen stocks at the Wall Street firms we cover, we always are anxious to provide our readers with the stocks that the top firms feel have the most upside from current trading levels to their price targets. The equity analysts at UBS A.G. (NYSE: UBS) have a compiled a list of the best large cap stocks to buy that they feel have at least a 10% upside potential, and many that have much more. Here are the top 10 large cap stock to buy at UBS with the highest upside potential for investors.
VMware Inc. (NYSE: VMW) has the potential to be the top percentage winner in the UBS large cap universe. The virtualization infrastructure solutions company, which is majority owned by storage leader EMC Corp. (NYSE: EMC) recently hit a 52-week low. VMware has faced mounting pressure over competitive concerns recently, but many traders are betting on a comeback by the cloud-computing company. The UBS price target for the stock is $105. The Thomson/First Call estimate is at $85. A move to the UBS target would give investors a 55% gain.
Catamaran Corp. (NASDAQ: CTRX) clearly has planted its flag as a major player in the pharmacy benefits management industry after securing Cigna Corp.’s (NYSE: CI) business for the next decade. This huge win for the company may drive revenues much higher than current estimates. The UBS price target is $68, and the consensus target is at $65. Trading to the target level would represent a 39% gain for shareholders.
Allergan Inc. (NYSE: AGN) is facing patent expiration on its dry eye disease drug Restasis in 2014. Restasis is a prescription eye drop used for the treatment of dry eye disease, approved for sale in 2002 by the U.S. Food and Drug Administration. Sales of Restasis are expected to reach $850 million to $890 million for 2013, as much as 15% of Allergan’s total revenue. While traders have hammered the stock, Allergan’s tremendous pipeline is encouraging for patient investors. UBS has put a $115 target on the stock, close to where it was trading in April. The consensus target is $105. The UBS target reflects a potential 36.5% gain for investors.
Franklin Resources Inc. (NYSE: BEN) markets the well-known Franklin and Templeton mutual fund families. Recently, the company announced the completion of the purchase of the remaining 80% stake in Pelagos Capital Management, an independent investment advisor. Such acquisitions will assist Franklin in improving and expanding its alternative investments and multi-asset solutions platforms, thereby helping to provide world-class investment solutions to its clients. UBS has a $185 target for this top investment services company. But the consensus is at $171. Investors are paid a small 0.9% dividend. UBS target equals a 36% gain from current levels.
Cobalt International Energy Inc. (NYSE: CIE) is starting to show up on lists of stocks to buy from many of the top Wall Street firms. The company is an oil exploration and production firm that operates with hydrocarbon-rich assets in Angola, West Africa and the Gulf of Mexico. It owns 246 blocks in the latter region with around 1.4 million gross undeveloped acres, but its real growth lies in Angola. Cobalt International now owns three blocks in Angola with more than 5.6 million gross undeveloped acres. UBS has a $36 price target, and the consensus stands at $38. A trade to the targets would provide investors a 35% gain.
Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) has been placed firmly in the takeover spotlight. Its top drug Soliris is the most expensive drug in the world, at an average annual cost of $409,500. Soliris itself treats a rare blood disorder called paroxysmal nocturnal hemoglobinuria, in which patients’ red blood cells break down faster than they are supposed to. The UBS price target is $123, while the consensus one is slightly lower at $120. Investors see a 33% gain at the UBS target.
Broadcom Corp. (NASDAQ: BRCM) makes one of the chips that make smartphones and tablets work. The company had a strong 2012, with overall revenue of up 8% year-over-year, reaching $8 billion, and cash flow from operations amounting to $1.9 billion, up 5% from the year-ago period. In the third quarter of last year, the company witnessed its first ever quarter to reach the $2 billion revenue mark. UBS has a $45 price target, but the consensus number is lower at $40. Investors are paid a 1.3% dividend, and they see a 33% gain if the stock hits the target.
Transocean Ltd. (NYSE: RIG) is the largest contractor of offshore drills in the world. In 2010, border issues between Norway and Russia were resolved and a treaty was signed to allow oil and gas exploration in the Barents Sea. Mapping and assessment completed by Norway estimates undiscovered oil in the region to be as high as 8 billion barrels of oil equivalent, up 31% from its previous estimate. The company operates seven rigs in this region and will benefit from the higher oil estimates. The UBS target for the stock is $63, though the consensus target is lower at $60. Investors are paid a stellar 4.7% dividend. Tack on a potential 31% if the UBS target is hit, and investors may have an awesome total return play.
Salesforce.com Inc. (NYSE: CRM) has destroyed the barrage of short sellers attacking the stock over the years. Their leadership position in the customer relationship management software sector (CRM) has continued to drive higher revenues and growth prospects. UBS has a price objective of $50, the same as the consensus target. The potential gain from the current trading levels is 31%.
Gilead Sciences Inc. (NASDAQ: GILD) wraps up the UBS top large cap potential gainers to buy. This company is mentioned prominently in the Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) takeover chatter. Its strong cash position, antiviral drug business and pipeline make its a very serious contender. UBS has set a $67 price target, and the consensus stands at $65. The UBS target represents a 30% gain from current levels.
This is a cornucopia of leading Wall Street stocks that have extremely solid potential for the future. The sheer diversity of the UBS stocks to buy makes it easier for investors to scan their current holdings and see which of these stocks may fit the best. If you are looking to add Alpha to your portfolio, these are names to consider.