Investing

Forget China, 10 Big Stocks Analysts Want You to Buy Now

Tyson Foods Inc. (NYSE: TSN) saw two analyst upgrades on May 14 for entirely different reasons. Independent research firm Argus raised its rating to Buy from Hold with a $92 price target and cited strong earnings and expectations. The larger impact call was that Credit Suisse upgraded the stock to Outperform from Neutral with a $96 target price. Credit Suisse sees significant upside for Tyson based on the African swine fever outbreak that is causing the forced killing of much of China’s pig population (perhaps as many as 150 million to 200 million pigs), with reports of it in other Asian countries too.

Shares of Tyson Foods closed down 0.3% at $79.59 ahead of the calls and traded up close to $82.50 late on Friday. Just keep in mind that Tyson shares already have risen from $55 earlier in this year to the current levels.

Under Armour Inc. (NYSE: UAA) was one of Friday’s top winners, with a 7.7% gain to $23.58. Its shares are now back close to a 52-week high after JPMorgan raised the athletic apparel maker to Overweight from Neutral and the target price to $29 from $23 on May 17. The firm cited controlled confidence of management and a disciplined approach to 2020 goals with a combination of products, innovation and marketing.

Under Armour had been indicated to open up 3.5% at $22.64 on Friday morning, so the stock opened higher and closed even stronger. The consensus target price is $22.08.

Valero Energy Corp. (NYSE: VLO) was reiterated as Outperform with a $105 price target at Credit Suisse on May 16. The prior closing price was $83.37, and the firm raised its 2019 and 2020 estimates to $7.21 from $5.55 per share and to $10.37 from $9.73 per share, respectively. Valero has a 52-week range of $68.81 to $126.98, and its consensus target price was $106.19.

Valero shares closed down 2% at $83.71 on Friday, and the call foresaw a gain of close to 25% to the price target, plus there is about a 4% dividend yield.

Wayfair Inc. (NYSE: W) was started with a new Buy rating at Jefferies, and the firm’s $192 price target implied upside of nearly 30%. This was well above the $159.36 consensus target price, and well above the 52-week high and all-time high of $173.72. Jefferies was talking up Wayfair’s marketplace and logistics network, increases in non-domestic site traffic share and a solid international trajectory along with more viral social media usage.

The call only created a 1.4% gain in Wayfair’s share price on Friday to a $150.40 close, even though it was just $3 short of being the street-high target price. This still leaves better than 25% implied upside, if the firm is correct.

Zillow Group Inc. (NASDAQ: ZG) had fallen out of favor compared to past glory days, but the market finally is getting over the shock its own home-oriented “offers” business on top of being a top real estate listings search destination. On May 15, Guggenheim upgraded Zillow to Buy from Neutral with a $45 target price (versus a $36.54 close). The call indicates that perhaps a trough has been found, and the stock traded up 2.5% to $39.78 on Friday as the post-earnings analyst call showed that its revenue rose 51%. The 52-week trading range is $26.20 to $65.42.

The Guggenheim call anticipated further upside of 23% at the time, but Friday’s close left an implied upside of closer to 13%. The late-week gain means that Zillow shares may have to be put on a watch list for when or if the market pulls back.

In addition, for value investors looking for a refuge this summer, we noted 13 dirt cheap dividend payers with steady payouts valued at less than 10 times earnings.

Merrill Lynch has five solid stocks to buy with high dividend yields as well.

Below is a montage of six-month charts on these 10 stocks (and the SPY and DIA ETFs for the broader market) to see how the performance has looked visually. This is a CancleGlance view from StockCharts.com.

Source: StockCharts.com