As we start to close in on the end of the year, with just seven trading weeks left in 2015, many investors are staring at portfolio statistics that are discouraging. With the Nasdaq the only index up solidly, and the Dow Jones Industrial Average actually down for the year, aggressive accounts are looking for ideas to help jump-start stagnant performance.
A new research report from Jefferies takes some bold shots this week with the firm’s top value calls. While all the companies have solid upside potential, they also have headlines swirling around them to some extent. We suggest that this week’s values calls are best suited for much more aggressive accounts.
The company posted weak sales of a top drug and got hit recently. AMAG Pharmaceuticals Inc. (NASDAQ: AMAG) has a diverse portfolio of products in the areas of maternal health, anemia management and cancer supportive care. It continues to work to expand the impact of these and future products for patients by delivering on its aggressive growth strategy, which includes organic growth, as well as the pursuit of products and companies that align with its existing therapeutic areas or those that could benefit from its proven core competencies.
The stock has hit 52-week lows recently and is down huge since July. Jefferies notes that the company reported very slow Makena sales, and the current valuation implies no sales at all after the exclusivity expires in 2018. The firm attributed the weakness to sales force integration issues and a higher Medicaid mix. The stock also has been pressured by its pipeline acquisition model.
The bottom line, at current levels, down a huge 58% in four months, not only is their upside, but it’s possible the company becomes a takeover target. It should be noted that purchase of these shares would only be suitable for very aggressive, risk-tolerant accounts.
The Jefferies target price is a gigantic $70, and the Thomson/First Call consensus target is $72.14. Shares closed on Tuesday at $29.34.
This large cap broadcaster has taken a beating this year but has bounced off the lows and could be an incredible value. CBS Corp. (NYSE: CBS) may be in the best position of all the broadcast networks. With an outstanding prime time lineup, solid sports franchises like the NFL, March Madness College Basketball, The Masters and other top programming, the venerable network could once again be an outstanding stock for shareholders. CBS is now in the midst of a significant stock repurchase process, and many on Wall Street expect it to shrink its share base by about 25% over the next two years.
Jefferies points out that network advertising and strong content licensing revenue drove the upside in the third-quarter earnings, which beat consensus estimates despite a slight revenue miss. Similar to the broadcasting giant’s rivals, many analysts expect CBS to look to book content licensing more evenly over the year and into 2016. Trading at just 12 times 2016 estimated earnings, the stock is cheap.
CBS shareholders receive a 1.25% dividend. While the Jefferies price target is $62, the consensus figure is a tick higher at $63. Shares closed Tuesday at $49.75.