Investing

10 Jefferies High-Conviction Stock Ideas for the Rest of 2020

Tesla stock has been on a huge short-squeeze-driven run, and CEO Elon Musk is unpredictable as well. The numbers keep rolling in and the stock keeps going higher, and the recently announced a five-for-one stock split is effective today. Jefferies noted that while its edge in cars may shrink, it continues to widen in other dimensions, such as software, battery capacity and industrial efficiency.

The Jefferies price target remains at $2,500, which is well above the $1,340.81 consensus target. Tesla stock ended Friday at $2,213.40 per share.

Vertex

Jefferies recently initiated coverage on the shares with a Buy rating, and the firm is very positive on this recent IPO. Vertex Inc. (NASDAQ: VERX) is an on-premise and cloud provider of tax compliance software (e.g., use tax, sales tax, value added tax) to large enterprises.

Vertex’s solutions enable real-time calculation of use tax at the point of sale and tax return filing. Vertex’s system uses a robust database of transaction types, rates, rules and borders across 19,000 jurisdictions in more than 130 countries.

The analysts report that, with a $21 billion total addressable market for third-party software that manages indirect taxes, they expect high-teens/low 20s revenue growth from this leading provider.

The $34 Jefferies price objective compares with a posted consensus target of $29. Vertex stock was last seen trading at $28.19.

Vital Farms

This was another recent IPO, and it is a company that may interest many younger inventors. Vital Farms Inc. (NASDAQ: VITL) packages, markets and distributes pasture-raised shell eggs, pasture-raised butter and ghee, and other products. Those products are sold under the trade names Vital Farms, Alfresco Farms, Lucky Ladies and RedHill Farms, primarily to retail foodservice channels.

Vital Farms should benefit from a first-mover advantage in pasture-raised eggs as it has created the necessary scale at a national level across its farmer network, egg production, distribution and market share (76%) for a differentiated, ethical business model. The analysts at Jefferies forecast 30% sales compounded annual growth rate for this ethical food company.

Jefferies has set its price target at $47. The $39 consensus target is just above Friday’s close at $38.13 per share.

W.W. Grainger

This stock has had a tremendous run and could be poised to move even higher. W.W. Grainger Inc. (NYSE: GWW) distributes maintenance, repair and operating supplies, as well as other related products and services, that are used by businesses and institutions in the United States, Canada, Europe, Asia and Latin America.

The company offers material handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies, building and home inspection supplies, vehicle and fleet components, and various other products. It also offers inventory management solutions and distributes tools, fasteners and safety and industrial supplies.

Holders of W.W. Grainger stock receive a 1.67% dividend. The price target at Jefferies is $410, while the consensus target is $346.67. Friday’s closing share price was $365.98.


These are 10 high-conviction stock picks for investors looking for ideas. With this very diverse group of selections, investors have a lot to choose from, some as mentioned much more aggressive than others. All these companies should continue to hold their own easily against peers in the coming months and years.