It sure seems like the financial media and pundits are turning bearish, despite the fact that overall sentiment is lousy and has been for some time, and some market metrics could be setting up for some outperformance soon. A new research report from Jefferies makes the case that we could actually rally some after weakness in the advance decline line showed up last week.
The Jefferies team is also very bullish on four U.S. stocks that they think are outstanding buys now. While two are total contrarian calls, that may not be a bad road to go down with the overall market pretty rich.
Carrizo Oil & Gas
This is a top energy stock for value investors to consider and was upgraded to a Buy this week at Jefferies. Carrizo Oil & Gas Inc. (NASDAQ: CRZO) is a Houston-based company actively engaged in the exploration, development and production of oil and gas from resource plays located in the United States. Carrizo’s current operations are principally focused in proven, producing oil and gas plays in the Eagle Ford Shale in Texas, Ohio’s Utica Shale, the Niobrara Formation in Colorado and the Marcellus Shale in Pennsylvania.
Many on Wall Street see the company as one of the best positioned due to the low break-even costs, solid operating scale and a very good balance sheet with ample liquidity. The analysts also think the company may take advantage of difficult situations for others and make acquisitions, especially in the Eagle Ford.
The Jefferies price target on the stock is $65. The Thomson/First Call consensus target is $58.38. Shares closed Friday at $38.13.
This top consumer discretionary stock has had an outstanding summer so far, up a sizzling 6.6%. Nike Inc. (NYSE: NKE) is a worldwide athletic giant and posted very strong fiscal fourth-quarter earnings in June. The company also has outstanding potential upside from a turnaround in its China business, improvements in gross margins and continued innovation-driven market share gains in both basketball and running footwear. With one of the most recognizable brands in the world, long-term investors may do very well adding shares here, despite the big move up in the stock this year.
Nike is benefiting from consumer preferences for “athleisure.” With the company’s extensive product line and recognizable worldwide branding, the stock continues to roll on year-after-year.
Investors are paid a 1% dividend by the sporting apparel giant. The Jefferies price target is $128, and the consensus target is posted at $117.57. Nike closed at $115.22 per share on Friday.