Investing
Top Stock Picks from the Oppenheimer Institutional Portfolio (GE, MSFT, HRB, TPX, PBH, KMX, ETP, NFLX, VPRT, BBRY, CREE)
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Most Wall St. firms are divided by the unit that calls on the retail or high net worth client, and the unit that calls on institutional clients. They both generally benefit from the research departments work. Typically, the retail client is bombarded with structured packaged products and MLP secondary stock issuance and advised to let “professionals” do the stock picking for them. Institutional clients are deluged with piles of research, strategy and analytics so they can make up their own minds about which stocks to pick.
We thought our readers would like to have the opportunity to get a look at the list of names that are the highlighted institutional portfolio stocks from Oppenheimer for April. The interesting difference, when comparing this to a typical bulge bracket list of stocks to buy, is that the usual mega cap blue chip names are missing. Institutional investors do not need another report on General Electric Co. (NYSE: GE) or Microsoft Corp. (NASDAQ: MSFT). They are looking for names with less coverage and more upside.
Most importantly, many institutions are looking for screened stock analytics and statistics that show positive breadth, alpha momentum and top quartile positioning in their respective universe. The Oppenheimer stocks exhibit all of those traits.
The following are the “favorable” institutional portfolio stocks from Oppenheimer.
Given the approaching tax deadline, H&R Block Inc. (NYSE: HRB) may be a timely name to look at. It typically does most of its business in the first half of the calendar year, the Thomson/First Call consensus price target for the stock is $28.50.
The maker of comfortable and expensive beds and cushions, Tempur-Pedic International Inc. (NYSE: TPX) is on the institutional list. In the first quarter, institutions and hedge funds bought 7 million shares of the stock, which represents almost 15% of the company’s stock float. The Wall St. consensus price target is $51.50.
With well-known, over-the-counter health products like Clear Eyes, Ludens and PediaCare in its portfolio, Prestige Brands Holdings Inc. (NYSE: PBH) is an Oppenheimer favorite. With numerous health care and household cleaning products to drive revenue, Prestige Brands could be a solid portfolio holding. The consensus estimate is $26.
Hitting 52-week highs as car sales have exploded, mega auto dealer CarMax Inc. (NYSE: KMX) grabs the right of way on the list. With sales coming from the lucrative used or “preowned” category, CarMax has excelled at generating consistent pricing to compete with branded auto dealerships. The consensus price target is $42.
Natural gas MLP Energy Transfer Partners L.P. (NYSE: ETP) is a surprise name on the Oppenheimer list. It is growing fast in the natural gas midstream, and intrastate transportation and storage businesses in the United States, and the stock pays investors a solid 7.10% quarterly distribution. The consensus price target is $52.
Entertainment content provider Netflix, Inc. (NASDAQ: NFLX) has had investors on a wild ride over the past two years. Trading above $300, falling to below $60 and back to almost $200 is the epitome of volatility. Timing and nerves of steel may be the critical components here. The consensus price target for the stock is $131. That is far below its current trading level.
Based in the Netherlands, Vistaprint N.V. (NASDAQ: VPRT) provides both businesses and customers at home with a wide variety of office products and stationery. A beneficiary of the improving economy, this solid, if not boring stock has a consensus price target of $33.50.
Controversial hero-to-zero stock BlackBerry (NASDAQ: BBRY) makes the list. With the company’s last-ditch effort to revive its smartphone business, the stock may need a transformation. The consensus estimate for this volatile name is not posted at this time.
Speaking of volatility, the final pick, light emitting diode (LED) manufacturer Cree Inc. (NASDAQ: CREE), has a seat at the Oppenheimer favorable table. It has additional revenue coming from its semiconductor materials business, and the stock often takes a hit anytime the “green” stocks are in trouble. The consensus price target for Cree is $47.82.
Read also: 19 Stocks Analysts Picked to Rise 50% to 100% — or More!
Individuals that get a look at what institutions see are not necessarily bound for investing glory. However, a glimpse into the names that have positive metrics beyond the usual earnings and anecdotal data may add value when deciding on which names fit into a personal portfolio.
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