INVESTMENT HACKS

STICKY

With the market so unpredictable, its time to call in the experts. We turned to Jefferies investment firm to take a closer look at some of their most recent top stock picks. Using TipRanks, we ensured all the analysts covered below have a stellar stock picking track record. This is based on algorithms that measure 1) the analyst’s success rate i.e. if the call was profitable and 2) the average return per rating. With this in mind, let’s dive in to some of the firm’s favorite stocks now:

BIO

Five-star Brandon Couillard (Track Record & Ratings) has just added BIO (BIO – Research Report) to the firm’s elite Franchise Pick list. This disruptive healthcare stock develops, manufactures, and markets a broad range of products for the life science research and clinical diagnostics markets.

Following a deep dive into the company’s offerings, Couillard writes: “We see substantial hidden value in BIO’s droplet digital PCR (ddPCR) franchise that is under-appreciated by investors.” He expects the segment to grow at a 20-30% CAGR over the medium-term.

Digital PCR is an emerging third-gen iteration of a ubiquitously used method for detecting DNA—and BIO holds a fortress IP position the field. “We think the ddPCR market could easily grow to >$1B+ over the next few yrs (still in infancy today), particularly as it migrates into the clinical liquid biopsy space” writes the analyst, calling this one of the most compelling multi-year product cycle stories in Tools.

A SOTP [sum-of-the-parts] analysis suggests the core business trades at just 7x ’20E EBITDA, a 50% discount to peers. Couillard’s $420 price target indicates 56% upside from current levels. See what other Top Analysts are saying about BIO.

STZ

Drinks giant Constellation Brands (STZ – Research Report) is the #1 total beverage alcohol company in the U.S. Its brands include Corona, Modelo and Meiomi. However, STZ is no longer a pure-alcohol play.

The company has just announced a massive $4 billion investment in Canada’s Canopy Growth for a 38% stake (up from 9.9% previously)- our “exclusive global cannabis partner,” according to Constellation Brands CEO Rob Sands. This is one of the reasons why Kevin Grundy (Track Record & Ratings) is such a fan of the stock.

He writes: “Our Buy rating for STZ is predicated on: (i) strong beer growth expected to continue (we model <10% organic sales); (ii) levers in place to deliver on Street margin estimates; (iii) unique exposure to the burgeoning cannabis market with stake in Canopy; and (iv) attractive valuation compared to high growth beverage peers.”

Net-net, we have a ‘compelling’ opportunity here, with a pullback that creates an attractive entry point. You can forget about Monster Beverages, “STZ is our top large-cap growth idea” concludes Grundy. This comes with a $289 price target (38% upside potential). See what Top Analysts are saying about STZ.

GOOGL

Alphabet (GOOGL – Research Report) has just released its highly-anticipated Q3 earnings results. Although earnings beat estimates, a slowdown in Google ad growth triggered a 3% pullback in shares.

“When everyone is in the same camp and you get a bit of bad weather coming in, everyone flees,” commented Jefferies’ Brent Thill (Track Record & Ratings) in the Financial Times. “Everyone was so overweight tech. Now you have this ongoing fear of a slowdown. There was not one company last night that reported an acceleration, they all showed a modest deceleration.”

Like most analysts, however, he is sticking with his bullish stance on the stock. He cites Alphabet’s “remarkably stable” revenue growth (excluding foreign exchange). Net revenue remains on path to hit $100 billion in the year. For the quarter there were three notable takeaways:

• Self-driving unit Waymo exceeding 10 million miles of autonomous driving testing.
• Acceleration in paid clicks on Google from 58% in Q2 to 62%.
• Cloud was a leading contributor to growth ahead of Google Play

Thill reiterated his GOOGL Buy rating with a $1,450 price target (34% upside potential). See what other Top Analysts are saying about GOOGL.

HAIN

Organic sales are growing, and fast. The Natural/Organic Food (NOF) Category is now valued at about $80 billion. It’s also a highly fragmented industry. That places Hain Celestial (HAIN – Research Report) in a very strong position.

Based in the US, Europe and India, Hain Celestial is one of the top 5 organic and natural products company with brands like Sun-Pat (peanut butter), Avalon (beauty products) and Ella’s Kitchen (baby food). Encouragingly, the company has just appointed Mark Schiller as CEO- a move viewed favorably by the Street given his strong track record at Pinnacle Foods.

“HAIN has now moved up to our #1 spot (from #7 previously) as we maintain that upside potential remains significant,” writes Jefferies’ Akshay Jagdale (Track Record & Ratings).

He sees several near-term catalysts on the horizon including potential asset sales and/ or a buyout, as well as a potential Sensible Portions distribution win at a large mass retailer in March 2019.

Moreover “We believe margin upside & M&A optionality remains among the best in our group.” In terms of share price, Jagdale is modeling for a whopping 86% upside from current levels to his $45 price target. See what other Top Analysts are saying about HAIN.

ATVI

Leading game publisher Activision Blizzard (ATVI – Research Report) also makes the cut as one of the firm’s top Franchise Picks. Analyst Timothy O’Shea (Track Record & Ratings) is buzzing over the release of ATVI’s Call of Duty BlackOps 4 on Friday 10/12. “While still early, there are signs Call of Duty Black Ops 4 is shaping up to be a smash hit” cheers the analyst.

Indeed, the game is looking like the most exciting version in years because of two key innovations. First is a big new mode called Blackout, an 80-player, winner-take-all tournament inspired by popular games like Fortnite and PUBG. Second, Black Ops 4 introduces vehicles like helicopters and jeeps, a franchise first.

As a result, O’Shea believes the game could sell 10M units at launch, exceeding Street estimates by 5M units, and deliver as much as 18% upside to Street EPS estimates for the December quarter. With a Street-high $90 price target, he sees 31% upside potential ahead.

View ATVI Price Target & Analyst Ratings Detail