As we have reported recently, many of the top firms on Wall Street that we cover at 24/7 Wall St. have made some final tweaks and changes to their top stock pick lists that they provide to institutional and high net worth clients. With this year proving to be a grind for investors, and the S&P 500 just barely positive, now is a good time for investors to maybe shed some losers and add some new stocks for the stretch run and 2016.
The RBC U.S. Equity Top Picks list has handily outperformed the S&P 500 this year and since inception. While the list is far more concentrated with only 20 positions, that puts a huge emphasis on the analysts to pick winners. We report on the changes to the list, and also screened for the stocks to buy with the biggest upside to the RBC price targets.
This top materials company is added to the list, and the timing could be outstanding. Louisiana-Pacific Corp. (NYSE: LPX) is a leading manufacturer of quality engineered wood building materials, including oriented strand board, structural framing products and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the United States, Canada, Chile and Brazil, LP building products are sold to builders and homeowners through building materials distributors and dealers and retail home centers.
The RBC price target for the stock is $22, and the Thomson/First Call consensus objective is $17.96. The stock closed most recently a $17.41.
This transport leasing company could have huge upside for investors if the RBC team is right. Air Lease Corp. (NYSE: AL) engages in the purchase and leasing of commercial jet transport aircraft to airlines worldwide. It also sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies and airlines. In addition, the company provides fleet management services to investors and owners of aircraft portfolios. As of December 31, 2014, the company owned a fleet of 213 aircraft, including 163 single-aisle narrow-body jet aircraft, 32 twin-aisle wide-body jet aircraft and 18 turboprop aircraft.
RBC cites the company’s industry leading upper teens potential return on equity, which is well above peers and most financial companies, and the lowest leverage in the sector, making debt coverage much easier. The firm also is very positive on the significant excess cash flow generation, which goes toward financing new aircraft and paying down borrowings.
The RBC price target is a gigantic $70, and the consensus target is much lower at $46.25. The stock closed Wednesday at $34.03, so trading to the RBC target would be over a 100% gain.