Investing

3 Top Jefferies Hidden Value Stocks to Buy Now

Micron Technology

This top technology stock has been absolutely mauled this year and we recently highlighted the company’s new value designation. Micron Technology Inc. (NASDAQ: MU) trades at a 3.38 price to cash flow figure. Since January the stock is down a massive 50%, and over 30% since the end of June. Many on Wall Street feel at these lower levels the company is a potential takeover candidate. It posted better than expected earnings last week, and while guidance was worse, the Jefferies team feels that is priced into the stock.

Micron Technology is a global leader in advanced semiconductor systems. Its broad portfolio of high-performance memory technologies, including DRAM, NAND and NOR flash, is the basis for solid state drives (SSDs), modules, multichip packages and other system solutions. The company’s memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.

Micron and Intel announced recently the availability of their 3D NAND technology, the world’s highest-density flash memory. Flash is the storage technology used inside the lightest laptops, fastest data centers and nearly every cell phone, tablet and mobile device. As noted above the collaboration with Intel on the 3D XPoint also creates new opportunities in SSDs. The UBS team also thinks that Micron has the most room to improve in enterprise grade SSD controllers, which include the electronics that bridge the flash memory components to the SSD input/output interfaces.

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The Jefferies price target is a whopping $30 and the consensus target is $26.21. Shares closed Tuesday at $18.22.

AT&T

This company posted solid second-quarter numbers, and many on Wall Street think the third quarter will be good as well. AT&T Inc. (NYSE: T) has to be one of the most ignored dividend plays on Wall Street. In fact, AT&T is the third most underweighted security, and the most under-owned by active fund managers, according to research data. While growth has been admittedly slower over the past few years, the company continues to expand its user base, and strong product introductions from smartphone vendors has not only driven traffic, but increased device financing plans, an area that many on Wall Street believe could lead to some earnings weakness.

Late last month AT&T reiterated 2015 guidance for double-digit revenue growth and continued consolidated margin expansion. Management expects capital spending to increase sequentially, and they also estimate that free cash flow could be better than $4.5 billion. Third-quarter wireless subscriber additions are also expected to come in slightly higher than many Wall Street estimates, and DirecTV saw positive video additions where many expected losses.

AT&T investors are paid an outstanding 5.64% dividend. The Jefferies price target is $40, and the consensus estimate is $37. Shares closed Tuesday at $33.31.

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These three top stocks offer not only tremendous value, but a degree of safety. While the recent moves higher in the market have helped to soothe investors, the bottom line is higher volatility is probably here to stay. So large cap value isn’t a bad place to reside for a while.

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