All the top firms on Wall Street we cover continually scrutinize the list of stocks that make up their top recommendations to both institutional and high net worth retail clients. This constant process is good for our readers, as it weeds out stocks that have been solid in the past but are either overvalued due to stock price appreciation or where the story has changed.
A newly released report from Credit Suisse updates the very extensive Top Picks list. With 150 top stock ideas from across every sector, there is a little something for everybody. With almost 10% of the old stocks out, we wanted to focus on the new additions, and we picked these five: Dunkin’ Brands Group Inc. (NASDAQ: DNKN), Allstate Corp. (NYSE: ALL), Bank of America Corp. (NYSE: BAC), Intel Corp. (NASDAQ: INTC) and Triumph Group Inc. (NYSE: TGI).
This one is a favorite for millions of Americans, especially on the East Coast. The company makes its debut on the top picks list and is now expanding westward to provide big competition to Starbucks. The company continues to roll-out its huge store expansion, returning to California last year for the first time since 2002. There are currently roughly 7,750 Dunkin’ Donuts restaurants in the United States and almost 3,160 elsewhere. The company has added to its menus and continues to post solid revenues each quarter.
Despite less than stellar comparable store sales last year, the Credit Suisse team thinks the expansion plan is on course. With record profits and margins last year, the multiple on the stock actually dropping, buying now makes good sense.
Dunkin’ Brands investors receive a solid 2.2% dividend. The Credit Suisse price target for the stock is $56. The Thomson/First Call consensus price target is at $49.67. The stock closed Thursday at $47.32 a share.
This is another new addition to the list, and a solid investment for more conservative accounts. The company is the nation’s largest publicly held personal lines insurer, protecting approximately 16 million households with auto, home, life and other insurance. The company’s “You’re in Good Hands” slogan is one of the most well-known in corporate branding.
The Credit Suisse team sees positive catalysts, including release of capital and the potential sale of the runoff life business. This generated capital could fund up to $1.5 billion in stock buybacks.
Allstate investors are paid a 1.7% dividend. The Credit Suisse price target is $84, and the consensus target is much lower at $73.90. Shares closed trading Thursday at $71.45.
Bank of America
This is yet another newly added stock to the Credit Suisse Top Picks list. The firm sees the bank emerging as the “new” Bank of America with strong earnings power across the franchise. The analysts also think $2 per share earnings is not out of the question for the money center giant.
The company is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers and 16,300 ATMs, as well as call centers and online and mobile banking platforms.
Bank of America investors are paid a 1.3% dividend. The Credit Suisse price target is a bold $21, and the consensus target is lower at $18.45. The shares closed trading Thursday at $15.54.
Intel jumps onto the list, and many firms, like Credit Suisse, are seeing value in the stock after a pretty hard share pricing beat-down. They also see the other areas starting to contribute a meaningful impact to revenues and helping to move the legendary Silicon Valley chip giant away from its massive personal computer dependence. The Credit Suisse analysts believe the company could earn up to $4 per share.
Wall Street analysts have pointed out recently that earnings confessions like Intel came out with are not that unusual in the chip world, and history suggests buying the confession pays in semiconductors. Many are of the opinion that the recent earnings warning announcement is a stellar opportunity for investors to buy a quality stock like Intel.
Intel investors are paid an outstanding 3.21% dividend. Credit Suisse has the stock price target set at $40. The consensus target is posted much lower at $34.70. Shares closed trading on Thursday at $30.81.
Triumph designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. It announced a very shareholder friendly 5 million share repurchase program last year.
This is another stock that has been knocked down hard, and it becomes a very solid valuation play in the analysts’ opinion. In fact, they feel the valuation is too attractive to ignore, especially with the momentum in the more highly regarded Systems business, where the top three programs are growing.
Triumph investors receive a small 0.3% dividend, The Credit Suisse price objective is a very hefty $79, and the consensus is at $66.83. Shares closed most recently at $59.33.
The Credit Suisse team is adding top stocks in which the valuations are reasonable. In a pricey market, this is very good advice for investors looking to stay involved, but who do not want to get hammered in a correction.
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