SunTrust Contrarian Picks Could Be Trump Infrastructure and Economy Winners
One of the worst traits on Wall Street is analyst and portfolio manager group think, where everybody holds a similar opinion, so the recommendations are often the same. That results in trades that are crowded, and they often end up in rough shape if something upsets the proverbial apple cart. The analysts at SunTrust Robinson Humphrey make the case that conventional wisdom is often not necessarily conventional or wise, and it is good to think outside the box.
In a new research report, the firm is out with 29 new ideas to generate alpha that are out of consensus. They have five in the industrial, building products and materials arenas that could all possibly benefit from the initiatives the Trump administration is planning for infrastructure, or that could benefit from an improving economy. All are rated Buy at SunTrust Robinson Humphrey.
This company has seen some solid insider buying over the past couple of years. Air Products Inc. (NYSE: APD) produces atmospheric gases, including oxygen, nitrogen, argon and rare gases; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, syngas; and specialty gases.
The company also provides equipment for the production or processing of gases, comprising air separation units and non-cryogenic generators for customers in various industries, including metals, glass, chemical processing, electronics, energy production and refining, food processing, metallurgical, medical and general manufacturing. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction and liquid helium.
Shareholders receive a 2.31% dividend. The SunTrust price target for the stock is $148, while the Wall Street consensus target is at $150.26. The shares closed Thursday at $149.06, so the SunTrust target could be lifted soon.
This stock has been way out of favor, and it could be a solid addition for patient accounts. Rexnord Corp. (NYSE: RXN) designs, manufactures and markets process and motion control and water management products worldwide. The company’s Process & Motion Control Platform segment designs, manufactures, markets and services engineered mechanical components used in complex systems. It offers table-top conveying chain and related accessories, gearing and gear drives, conveying equipment, industrial chains, and custom assemblies; shaft management products; assemblies; and aerospace components, specialized gears, and related products.
The company has garnered attention as it is looking to close a plant in Indianapolis and move the jobs to Mexico and Texas. However, with it trading at a very cheap 10 times 2017 EDITDA, the analysts note that is a discount to the historical premium. The stock looks reasonable at current levels
SunTrust has a price target of $22, and the consensus target is listed at $21.25. Shares closed Thursday at $21.10.