Baird Adds New Top Stocks to Buy to Its Focus List

June 4, 2015 by Lee Jackson

With summer just around the corner, most of the major Wall Street firms that we cover are making some changes and additions to their firms top stock ideas for institutional and high net worth investors. At one of the top regional brokerage firms, Baird, they are making some additions to the firm’s Focus Idea list that look like they make very good sense for investors searching for new ideas.

The Baird Focus Idea list is a selection of the top stock ideas at the firm organized by growth and value, as well as by sector. The firm added 16 new stocks to the list. We screened the new additions for those with the best upside to the Baird price target.

Autodesk

This company is an outstanding tech stock that now makes the list. Autodesk Inc. (NASDAQ: ADSK) operates as a design software and services company worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a computer-aided design application for professional design, drafting, detailing and visualization, as well as AutoCAD LT, a professional drafting and detailing software. The stock has sold off from highs printed in February and may be offering a stellar entry point.

The company is beginning to benefit from the increased adoption of cloud-based services. The company’s software packages like Fusion 360, BIM 360 and PLM 360 are also gaining traction. However, in the near term, profitability may remain under pressure due to investments in cloud-based infrastructure and marketing initiatives. The company reported so-so earnings, and many feel any increase in construction, especially commercial, can help.

The Baird price target for the stock is $70. The Thomson/First Call consensus target is right in line at $70.72. Shares closed Wednesday at $54.94.

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Ryder System

This top transport stock looks to be offering good value now. Ryder System Inc. (NYSE: R) provides transportation and supply chain management solutions. It operates in two segments, Fleet Management Solutions and Supply Chain Solutions. Ryder also has been named among FORTUNE magazine’s World’s Most Admired Companies, and it has been recognized for its industry-leading practices in third-party logistics, environmentally friendly fleet and supply chain solutions, and world-class safety and security programs.

Ryder investors are paid a 1.6% dividend. The Baird price target is posted at $111, the same as the consensus target. Shares closed on Wednesday at $93.61 apiece.

SolarWinds

This company is another top tech idea added to the Baird list. SolarWinds Inc. (NYSE: SWI) offers enterprise-class network management products, including SolarWinds Network Performance Monitor that monitors and analyzes network performance metrics for routers, switches, servers and other simple network management protocol enabled devices, as well as additional network management products for various network management issues.

The company focuses almost exclusively on information technology pros and strives to eliminate the complexity that they have been forced to accept from traditional enterprise software vendors. SolarWinds delivers on this commitment with simplicity through products that are easy to find, buy, use and maintain while providing the power to address any IT management problem on any scale.

ALSO READ: Deutsche Bank’s 3 Top Tech Stocks to Buy Before the Market Corrects

Baird has a $60 price target on SolarWinds, while the consensus objective is set at $58.50. The shares closed trading on Wednesday at $49.12.

TerraForm Power

This company may be just the right stock for investors that like the alternative energy sector but want a more conservative route. TerraForm Power Inc. (NASDAQ: TERP) owns and operates solar and wind generation assets serving utility, commercial and residential customers. Its portfolio consists of solar projects located in the United States, Canada, the United Kingdom and Chile with total nameplate capacity of 887.1 megawatts. The company was formerly known as SunEdison Yieldco and changed its name last year. It is perhaps one of the highest profile companies operating as a yieldco. Some Wall Street analysts see distributions rising to 5.65% by 2017.

The Baird team feels that the combination of dividends and a growth-oriented company in the renewable energy field makes good sense. The company’s relationship with the sponsor SunEdison is a positive because of its large development pipeline and incentive to grow TerraForm’s portfolio, which is composed of projects with long-term contracts in place, solid counterparties with high investment grade credit ratings, very diversified assets (including solar and wind projects) and low asset ages.

The Baird price target is $45, and the consensus target is $44.57. The stock closed trading Wednesday at $38.96 per share.

ALSO READ: 10 Stocks to Own for the Next Decade

The new additions to the Baird list make good sense for long-term growth investors looking to shift capital. They largely avoid high volatility momentum stocks, and that is very wise in a pricey market.

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