Jefferies Has 4 Top Value Stocks to Buy With Solid Upside Potential
May 6, 2016 by Lee JacksonMore and more you can see that the rest of 2016 could be absolutely crazy from a volatility aspect. With the match-up for the president looking to be Hillary Clinton versus Donald Trump, you can count on some big swings in the market as opinion shifts back and forth and the rhetoric gets ratcheted up. One thing that makes sense is to shift portfolios toward more conservative stocks that have value characteristics.
A recent research report from Jefferies focuses on stocks that not only have very solid franchises but remain priced at a level that puts them into a value category. Again, with the potential for volatility to spike over the remainder of this year, shifting to stocks that are a touch more stable makes good sense. All four of the Jefferies value stocks are rated Buy.
AT&T
This company had an outstanding first quarter from a stock price standpoint and could be poised to go higher. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE. The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions.
With its shares trading at a very cheap 12.5 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans.
AT&T has been focusing on the IP VPN and Ethernet services. This outstanding business model, along with the decline of Verizon’s market share in the arena, has helped the company meaningfully grow its revenues from strategic business services. Apart from taking appropriate technical measures, the company has collaborated with big cloud service providers like Amazon Web Service and data center operators to provide Ethernet connections.
The company reported adjusted first-quarter earnings of $0.72 per share on revenue of $40.5 billion back in April. Its revenue rose 24% from the year-earlier period primarily due to the July 2015 acquisition of DirecTV for $49 billion in equity value. The company added 2.3 million wireless subscribers during the first quarter. About 328,000 of the additions were DirecTV net adds. The company’s Entertainment Group broadband grew with 186,000 IP broadband net adds.
AT&T investors receive a huge 4.96% dividend. The Jefferies price target for the stock is $44, and the Thomson/First Call consensus estimate is $39.55. Shares closed Thursday at $38.74.
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