A new research report from the global equity team at RBC revisits their top global stock suggestions for 2014 to update and give investors a progress report. We scanned their list for the top domestic ideas, especially those they felt were poised for a strong second half of 2014.
With the holiday over and the second half underway, many investors are taking a look at their portfolios for a mid-year checkup. After an extraordinary run over the past two years, taking some profits, re-establishing some cash and looking for new ideas makes very good sense.
Here are the top domestic names to buy from the RBC global stocks list.
Advance Auto Parts Inc. (NYSE: AAP) makes the list, and auto parts stores as a whole are having a fantastic year. The brutal winter weather wreaked havoc with cars in general, and the retailers have seen a direct benefit. Investors are paid a miniscule 0.2% dividend. RBC has a $149 price target on the stock. The Thomson/First Call consensus target is $140.29. Shares closed Thursday at $134.94.
Amphenol Corp. (NYSE: APH) is one of the top picks at RBC. The company’s Fiber Systems International division last year won a $45 million firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the procurement of a “Mixed Fiber Optic Cable Assembly” to replace the “Light-Emitted Diode based CX-13295 Tactical Fiber Optic Cable Assembly” currently being used by the United States Marine Corps. This combined with other solid government contracts procured since is continuing to boost revenues. Investors are paid a small 0.8% dividend. RBC has a $100 price target and the consensus estimate is $99.46. Shares closed ended last week at $97.82.
CBS Corp. (NYSE: CBS) may be in the best position of all the broadcast networks, and it is one of the top picks at RBC. With an outstanding prime-time lineup, solid sports franchises like the NFL, March Madness College Basketball, The Masters and other top programming, the venerable network has been an outstanding stock for shareholders.
The broadcasting giant is now in the midst of a significant stock repurchase process, and the RBC team expects CBS to shrink its share base by about 25% over the next two years. Investors are paid a small 0.8% dividend. The stock is up over 60% in the past year. The RBC price target is $70. The consensus target is $63, but CBS closed Thursday at $64.30.
Concho Resources Inc. (NYSE: CXO) is a top energy play in the Permian Basin in West Texas. The company is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. It also may be a possible takeover candidate.
Concho just completed a successful secondary stock offering that raised close to $1 billion, if the over-allotment shares were sold. The company plans to use the net proceeds from this offering to repay the debts under the company’s credit facility, as well as for corporate purposes that include financing its three-year accelerated growth plan, capital expenditure tied to the recently announced midstream joint venture and potential future asset buys. RBC has the company as a top pick, with a $148 price target. The consensus target is $150.34. Concho closed Thursday at $142.33.