The Wall Street firms that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally in the companies they not only like on a longer term basis, but those with stocks that usually have big upside to the assigned target price. With the third quarter over, many firms have tweaked their lists of top stocks to account for continued changes in the fourth quarter and into 2021.
In a recent Jefferies research report, the analysts made a big sector move by adding a top industrial stock to the firm’s Franchise Picks list of top stock ideas. Owens Corning (NYSE: OC) is the newest member and the company produces and sells glass fiber reinforcements and other materials for composites, as well as residential, commercial and industrial building materials worldwide.
The company operates in three segments. The Composites segment manufactures, fabricates and sells glass reinforcements in the form of fiber, and its manufactures and sells glass fiber products in the form of fabrics, non-wovens and other specialized products.
The Insulation segment manufactures and sells fiberglass insulation into residential, commercial, industrial and other markets for thermal and acoustical applications. It manufactures and sells glass fiber pipe insulation, flexible duct media, bonded and granulated mineral fiber insulation, cellular glass insulation and foam insulation used in above- and below-grade construction applications.
The Roofing segment manufactures and sells residential roofing shingles, oxidized asphalt materials and roofing components used in residential and commercial construction, and specialty applications, as well as synthetic packaging materials.
The Jefferies team sees significant untapped earnings power being unleashed, with Owens Corning generating $6.50 or more in earnings per share, which is 15% above Wall Street estimates for 2022, and that number is up about 45% from 2019.
Investors in Owens Corning stock receive a 1.38% dividend. The Jefferies price target for the shares is $84, and the Wall Street consensus target is $73.06. The last trade on Thursday was reported at $69.66 a share.
The Jefferies team removed Martin Marietta Inc. (NYSE: MLM) from the Franchise Picks List.
We also screened the Franchise Picks, looking for companies that could be solid stocks to own for the fourth quarter. These four look like conservative ideas for investors to consider now. It’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Casey’s General Stores
This hot consumer staples stock also resides on the Franchise Picks list. Casey’s General Stores Inc. (NASDAQ: CASY) and its subsidiaries operate convenience stores under the name Casey’s General Store in approximately 10 Midwestern states, including Iowa, Missouri and Illinois.
The company operates approximately 1,930 such stores, as well as two distribution centers through which it supplies grocery and general merchandise items to its stores. Its general store typically carries over 3,000 food and nonfood items. The stores sell regional brands of dairy and bakery products, and approximately 90% of the stores offer beer. Its nonfood items include tobacco products, health and beauty aids, school supplies, housewares, pet supplies and automotive products.
Jefferies has remained bullish for some time and said this:
Aside from the appeal of a consolidator in the highly fragmented c-store segment that is seeing structural tailwinds to fuel margins, we continue to like the company due to its superior food service offering and self help initiatives that should help deliver solid market share gains in its small town footprint and robust EBITDA growth long term.
Shareholders receive just a 0.71% dividend. Jefferies has a $225 price objective, and the consensus price target is $193.20. Casey’s General Stores stock closed at $180.20 on Thursday.