If there is one thing Wall Street has been guilty of over the years, it is a sort of herd mentality. This that leads to “overcrowded” trades, where everybody is long the same stocks. A recent research note from SunTrust Robinson Humphrey highlights some outstanding stocks that are way out of consensus at Wall Street firms and by portfolio managers at mutual funds and hedge funds.
We screened the most out-of-consensus stocks for market cap and liquidity. Some of the stocks were surprising, as they would not seem to be out of favor by analysts and portfolio managers. Here are three we zeroed in on: Eli Lilly & Co. (NYSE: LLY), Allscripts Healthcare Solutions Inc. (NASDAQ: MDRX) and Vantiv Inc. (NYSE: VNTV).
This huge pharmaceutical leader is surprisingly out of consensus with portfolio managers at mutual funds and hedge funds, or what is known as the buy side. It also has more Neutral ratings than Buy ratings on Wall Street.
The company easily beat analysts’ earnings expectations for the first quarter, reporting earnings of $0.87 per share, which topped guidance by 11 cents per share. Revenues for the period declined 1% to $4.65 billion, but they were still enough to top analysts’ $4.63 billion expectations.
While generic competition is eating into profits with the company’s Cymbalta and Evista drugs, and currency headwinds took a toll on overseas sales, the drug giant still affirmed forward expectations.
Eli Lilly shareholders are paid a solid 2.8% dividend. The consensus price target for the stock is $77.59. Shares closed Friday at $71.58 apiece.