Investing

RBC's Top Quintile Quantitative Portfolio Stocks to Buy Now

Most firms we cover on Wall Street have quantitative strategies for their clients, and often they use similar formulas to arrive at what belongs in the top quintile versus the bottom. Cash flow is often a very important statistic, and in the case of the work that the analysts do at RBC, their proprietary final sales metric, which is sales less accounts receivable on a year-over-year basis, is often the most significant factor they track. They believe final sales is a good indicator for tracking early pickups in “quality sales,” especially in an environment where economists are forecasting a significant acceleration in economic activity this year.

In a new research report, RBC added numerous stocks across all sectors to its top quintile status. We screened by sector to pull stocks to buy for our readers looking to redeploy capital for the balance of the year.

Gannett Co. Inc. (NYSE: GCI) makes the list in consumer discretionary, which is a sector that has struggled this year. The company recently announced plans to split up its newspaper and broadcast businesses, which as the support of activist investor Carl Icahn, who just disclosed a 6.6% stake in the publishing company. Gannett has numerous television stations in major markets and also publishes the popular USA Today newspaper. Investors are paid a 2.7% dividend. The Thomson/First Call consensus price target is $37.56. The stock closed Friday at $34.56 a share.

ALSO READ: Warren Buffett’s Top New Stock Holdings

Hess Corp. (NYSE: HES) is a top energy name that is also on the RBC top quintile list. The company has been has been the subject of takeover speculation in the past, and some of that chatter has reemerged recently. With a market capitalization of $31 billion, the company could fall prey to larger integrated as a quick bolt-on acquisition to boost growth. Investors are paid a 1% dividend. The consensus price target is $106.11. Hess closed Friday at $98.90.

BlackRock Inc. (NYSE: BLK) is one of the world’s largest money management firms and is a top quintile pick in the financial sector. The firm primarily provides its services to institutional, intermediary and individual investors. It also manages accounts for corporate, public, union and industry pension plans, insurance companies, third-party mutual funds, endowments, foundations, charities, corporations, official institutions and banks. BlackRock manages $4.4 trillion worth of client money. Investors are paid a 2.7% dividend. The consensus price target is $357.35. Shares closed Friday at $315.11.

Amgen Inc. (NASDAQ: AMGN) is one the top blue-chip stocks in the biotech world and a UBS top quintile addition in health care. It recently announced that its FOCUS trial of Kyprolis in patients with relapsed and advanced refractory multiple myeloma, a cancer of plasma cells, had failed, which was a near-term catalyst many had been watching for. Despite the failure, the stock has bounced back, and that combined with its acquisition of Onyx pharmaceutical last year bodes well for the future. Investors are paid a 2% dividend. The consensus price target it $140.15. Amgen closed Friday at $132.80.

Jacobs Engineering Group Inc. (NYSE: JEC) makes the grade as an industrial stock. With approximately 200 offices located around the world, Jacobs is one of the world’s largest and most diverse providers of technical professional and construction services. It announced last week a substantial new contract from ExxonMobil Chemical to provide engineering, procurement and construction services as part of a multibillion dollar ethane cracker project in ExxonMobil’s Baytown, Texas, complex. The consensus price target is $62.74. Shares closed Friday at $51.27.

ALSO READ: 10 Analyst Stocks Under $10 With Massive Upside

Semtech Corp. (NASDAQ: SMTC) falls into top quintile status in the technology sector. The company is a leading supplier of analog and mixed-signal semiconductors for high-end consumer, computing, communications and industrial equipment. The company’s LoRa RF technology was recently adopted by Microchip Technology for a big design win. The technology enables long-range, low-power connectivity that previously had been unrealizable. Competing short-range technology requires too many repeaters and too much infrastructure to achieve wide coverage, and it has limited capacity in the network to connect a high volume of nodes. The consensus price target is $30.56. The stock closed on Friday at $23.47.

Many of the RBC top quintile names have solid upside potential to their projected consensus price targets. Investors who have substantial gains, especially long-term gains, may want to rotate funds to these very solid stocks.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.