Merrill Lynch Has 4 Big 2015 Losers to Buy for Big Potential 2016 Gains

Print Email

Enterprise Products Partners

This stock is down 33% this year but remains one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) once again, despite the energy slump, just raised the distribution 1%. Enterprise Products maintains a very good long-term position in the market. It provides many of its services on the basis of long-term, fixed-fee contracts, insulating against some of the wilder swings of the commodities that it trades in.

One reason why many analysts may have a liking for the stock might be its distribution coverage ratio, which is well above one times, making it relatively less risky among master limited partnerships. The company’s distributions have grown for several quarters and are expected to continue in 2016.

Investors receive a very solid 6.17% distribution. Merrill Lynch has a $35 price objective, and the consensus target is $34. Shares closed Tuesday at $24.97.

SunEdison

This top solar company has been absolutely destroyed, down over 80% since July, after pushing higher since the beginning of the year. SunEdison Inc. (NYSE: SUNE) manufactures solar technology and develops, finances, installs and operates distributed solar power plants, delivering predictably priced electricity and services to its residential, commercial, government and utility customers. It also provides 24/7 asset management, monitoring and reporting services for hundreds of solar systems worldwide via its Renewable Operation Center.

SunEdison bought Vivint Solar in a cash, stock and convertible securities deal that some on Wall Street thought was ill-advised. Some investors are wary of the buying binge and don’t feel the company has the profits to support all the transactions. With the new breath of life from the tax credit extension, the deal was renegotiated with less cash outlay, a positive for SunEdison and its yieldco company TerraForm Power.

Merrill Lynch has a huge $12 price target. The consensus target is even higher at $15.13. The shares closed trading Tuesday at an incredibly low $5.02.


There you have it, four solid companies that for one reason or another were eviscerated in 2015. While their shares are not suitable for conservative accounts, aggressive investors with a patient time frame could score big gains in 2016 and beyond.