Merrill Lynch Adds Top Gaming Stock to Endeavor Small Cap Portfolio

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CyrusOne

This is a top pick among the data center stocks. CyrusOne Inc. (NASDAQ: CONE) designs, builds and operates facilities across the United States, Europe and Asia that give its customers the flexibility and scale to match their specific growth needs. Specializing in highly reliable enterprise-class, carrier-neutral data center properties, the company provides robust data center infrastructure to ensure the continued operation of IT equipment for a rapidly growing list of organizations that now nears 900, including nine of the Fortune 20 and more than 160 of the Fortune 1,000 or equivalent-sized companies.

Many analysts feel that some of the best returns in the data center sector may be found in the smaller players in the space like CyrusOne. The stock trades at numerous lower multiples than their bigger competition and top analysts feel that the discount valuation is not warranted given the recent surge in leasing and above-average growth. The company has also exhibited faster deployment times, rapid new market expansion and low churn among customers, all bullish reasons for buying the stock.

CyrusOne unitholders are paid a solid 3.33% distribution. The $60 Merrill Lynch price objective is less than the $63.71 consensus target. The shares at $54.65 Thursday morning.

HubSpot

This stock has had a solid run since selling off late last year. HubSpot Inc. (NYSE: HUBS) is a cloud-based provider of inbound marketing tools such as website content management, blogging tools, email campaign, search engine optimization, social media monitoring and management, CRM and others for small businesses and mid-sized companies.

The company’s tools provide a single console for marketing professionals to generate new customer leads, convert leads to customers and customers to repeat customers.

This is a top technology holding among the managers in the survey, and a Jefferies report notes that 39.5% of those surveyed own shares in their portfolios.

Merrill Lynch has set its price target for the shares at $135. The consensus target is $123.81, and the stock traded at $121.25 a share.

International Game Technology

This company has been hit some after doing a secondary where a large shareholder did a forward sale and is offering a great entry point. International Game Technology PLC (NYSE: IGT) is the global leader in gaming. The company enables players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming.

Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, International Game Technology gaming solutions anticipate the demands of consumers wherever they decide to play. The company has a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and it creates value by adhering to the highest standards of service, integrity and responsibility.

Many top Wall Street analysts feel the company will be one of the major gaming infrastructure beneficiaries from the recent Supreme Court ruling.

Merrill Lynch has a $36 price target. That compares to the consensus target of $34.17 and the recent share price of $26.05.

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Two new portfolio additions and three companies that also could be outstanding additions with the potential for near-term catalysts. Again, all are better suited for aggressive growth accounts.