With a stock market that has started off 2015 to the downside, many investors with new cash or profits from 2014 trades, may be looking for new trading ideas for the year. The equity research team at Oppenheimer has released the firm’s 35 best trading ideas for 2015, and the list is packed with companies that could be poised for significant upside if the right pieces fall into place.
We screened the Oppenheimer list for top large cap stocks that have declined substantially since the last quarter of 2014 and the beginning of the year. The screening of the list provided some outstanding companies for investors to consider for the rest of 2015. All are rated Outperform.
Apple Inc. (NASDAQ: AAPL) has traded down since the beginning of the year despite many on Wall Street being positive for the holiday selling season and a sharp rise in smartphone market share. Many are pointing to the possible disappointment from the Apple Watch. The Oppenheimer team is very positive for the outlook on the iPhone 6 and the iPhone 6 Plus. They also see the overall Apple product line enhanced by the addition of Apple Pay and HealthKit.
Apple investors are paid a 1.75% dividend. The Oppenheimer price target for the stock is $125. The Thomson/First Call consensus price target is $122.74. Shares closed Thursday at $106.82.
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Alibaba Group Holding Ltd. (NYSE: BABA) is the largest online and mobile commerce company as measured by gross merchandise volume, and it was the highest profile IPO of 2014. The stock has acted horrible since printing highs at $120 in mid-November. Plain and simple, the Oppenheimer team feels the dominance in Alibaba’s core business, the very hard barrier to entry for competition and new growth opportunities like cross-border e-commerce make the stock extremely attractive.
Oppenheimer has a $130 price target, and the consensus target is posted at $120.42. Shares closed Thursday at $96.31.
Citigroup Inc. (NYSE: C), like all the major banks, posted less than stellar fourth-quarter results. Gigantic legal costs were one issue, totaling up to a $3.5 billion charge, and a large drop in bond trading revenue was another. The strengthening U.S. dollar also took a bite out of overseas revenues. The Oppenheimer team points out the bank trades below book value, and they estimate it has the ability to earn as much as $6 per share, perhaps more if the capital markets improve.
Shareholders are paid a tiny 0.1% dividend. The Oppenheimer price target for the mega-bank is a whopping $70, and the consensus target is much lower at $60.12. The stock closed at $47.23, down over 3%.
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3D Systems Corp. (NYSE: DDD) is one of the two biggest 3D printing companies, and it has been an incredibly volatile stock. Now may be a good time for investors to revisit. Its 3D printers convert data input from computer-aided design software or 3D scanning and sculpting devices to printed parts. 3D printing was a super-hot segment last year, and the top stocks were absolutely eviscerated in the early spring sell-off and again in October. Hot and fast money loves to be long and short this top stock, so entry points are critical. The Oppenheimer analysts who cover the stock feel that the company’s product line is strong enough, but notes that uneven earnings results can contribute to extreme volatility. They see accelerating 2015 growth as a spark that can lift the stock.
3D shareholders are paid a small 0.6% dividend. Oppenheimer has a $57 price objective, and the consensus target is $45.10. 3D systems closed Thursday at $28.33.
Netflix Inc. (NASDAQ: NFLX) continues to be a top media and services play on Wall Street, and the company announced yet another expansion of its programming and reach last year across Europe, which the Oppenheimer teams see continuing internationally. The consensus on Wall Street is that Netflix is likely to benefit from a materially stronger original content launch, which would bolster the already strong franchises like the hit political show “House of Cards.” With many consumers tired of rising cable and carrier content prices, the streaming leader may be poised for a big 2015.
The Oppenheimer price target is $431, and the consensus target is $415.86. Shares close trading on Thursday at $323.76.
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The outstanding stocks presented by Oppenheimer for 2015 are all trading way below 52-weeks highs and give investors the comfort of knowing they are not buying at the proverbial top. While aggressive, and not suitable for very conservative portfolios, they all make good sense from a valuation standpoint.
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