It has been a roller-coaster year so far, and as we have noted recently, the ride could become a little more bumpy this summer as a ton of headline data could weigh on things.
One thing is for sure, certain sectors look far better than others, and it appears that large and mega cap stocks are still by far the best place for investors to be, especially as we go into the last six months of the election cycle.
A very interesting new research report from Baird highlights stocks from the firm’s Estimate Revision Model during its review of the S&P 500 this month. With the bias remaining solid for large caps, the analysts at Baird track favorable stocks in the various sectors which they label as in-motion or contrarian.
We picked four stocks from the report labeled as contrarian and from sectors that appear to be shaping up best for the balance of the year, and we feature them here.
This company is flat-out cheap, trading at about six times enterprise value to EBITDA, and it is being taken private in a deal with Dell. EMC Corp. (NYSE: EMC) is technology’s large-scale storage leader, but new avenues of flash and other storage opportunities are grinding away at the tech giant’s business. The good news for the company is that storage demands are accelerating.
The company’s majority ownership of VMware gives it a virtualization infrastructure solutions product, which includes a suite of products designed to deliver a software-defined data center, run on industry-standard desktop computers and servers. Wall Street was very positive on the platform-as-a-service opportunity and believes EMC’s Pivotal could grow to be a significant business.
Dell is buying the storage giant for a stunning $67 billion, which will make it the largest deal in tech history when completed. The computer maker plans to pay $24.05 a share in cash plus tracking stock VMware, valued at about $9 for each EMC share. This is a very interesting one among the contrarian ideas.
EMC shareholders are paid a 1.7% dividend. The Thomson/First Call consensus price target for the stock is $28.71. The stock closed most recently at $27.14 per share.