Investing

Credit Suisse Adds 10 Stocks to Buy to Its 2014 Top U.S. Investment Ideas List

With the fourth-quarter earnings season starting to really kick off this week, many firms we cover are adding stocks to buy for 2014 to their top ideas lists. The Credit Suisse list is extensive and has 161 names for investors to consider. The firm recently added 30 names to the list, which is the first addition since last published in early December. Ten of those names make its #1 Top Picks list.

The Credit Suisse Top U.S. Investment ideas report is a “one-stop shop” for the research team’s highest conviction ideas. Each analyst identifies and ranks up to three top stock picks based on a six- to 12-month horizon. In an effort to limit the list to only high-conviction ideas, analysts are allowed to submit fewer than three stocks. For each name, they include a short summary of the thesis as a starting point for further analysis.

Here are the 10 new #1 Top Picks added to the Credit Suisse list.

Aetna Inc. (NYSE: AET) stock climbed to a new all-time high last Thursday as a Credit Suisse analyst upgraded the health insurer’s rating, saying the Coventry Health Care acquisition provides a bit of a cushion as uncertainty surrounds health care reform. Aetna completed that $5.7 billion acquisition in May. Ralph Giacobbe of Credit Suisse said in a client note that Coventry continues to do well and should add more to Aetna’s earnings this year. Investors are paid a 1.3% dividend. The Credit Suisse price target for the stock is $80. The Thomson/First Call estimate is posted at $75.05. Aetna closed Monday at $71.04.

American International Group Inc. (NYSE: AIG) has risen from the ashes of the 2008 meltdown and is as strong as ever. The stock is ranked as the third-largest holding at hedge funds after Apple and Google. Investors are paid a small 0.8% dividend. The Credit Suisse price target for the stock is $60. The consensus price target for this top stock is $55.67. AIG closed Monday at $51.46.

Cheesecake Factory Inc. (NASDAQ: CAKE) owns and operates casual dining and full-service restaurants in the United States and Puerto Rico. As of December 19, 2013, it operated 168 restaurants under the Cheesecake Factory mark, 11 under the Grand Lux Café mark and one under the RockSugar Pan Asian Kitchen mark. Investors are paid a 1.2% dividend. Credit Suisse has a $54 target, and the consensus is at $48.42. The stock closed Monday at $46.89.

EOG Resources Inc. (NYSE: EOG) is a top energy name added for 2014. The company is fueling record oil and natural gas production that is revolutionizing the U.S. energy position. The company’s position in the three biggest tight oil plays makes it a huge player in the exploration and production field. EOG Resources would be a huge acquisition for even the biggest of big oil companies. That said, there is a lot to like about EOG as it is the top producer in the Eagle Ford Shale and it has solid positions in both the Bakken and Permian Basin. Investors are paid a tiny 0.5% dividend. The Credit Suisse price target for the stock is posted at $210, and the consensus figure is $195. Shares closed Monday at $163.46.

Energy Transfer Equity L.P. (NYSE: ETE) is a top MLP name for 2014 at Credit Suisse. The company announced a $1 billion stock buyback program in late December. This is significant for investors as the company is buying back stock despite an outstanding 2013, which saw the stock move considerably higher. Investors are paid a 3.3% distribution. The Credit Suisse price target is $90, while the consensus figure is at $91.50. The stock closed Monday at $82.86.

Gartner Inc. (NYSE: IT) provides independent and objective research and analysis on information technology (IT), computer hardware, software, communications and related technology industries. Its Research segment provides objective insight on critical and timely technology and supply chain initiatives for CIOs, other IT professionals, supply chain leaders, technology companies and the investment community through reports, briefings, proprietary tools, access to analysts, peer networking services and membership programs. The Credit Suisse target is posted at $75, and the consensus is at $68.60. Gartner closed Monday at $68.49.

Mohawk Industries Inc. (NYSE: MHK) has benefited from the leap in the housing market over the past two years. The stock posted a 52-week high last week and is poised to go higher as most of the Wall Street firms we cover see a continuation of the strong housing market in 2014. Credit Suisse has a $160 price target for the stock. The consensus stands at $160.70. Mohawk closed Monday at $146.69.

MSCI Inc. (NYSE: MSCI) provides customers a suite of performance, risk management and corporate governance products and services worldwide. The company operates in two segments: Performance and Risk, and Governance. The company’s flagship product offerings are the MSCI indices with approximately $ 7.5 trillion estimated to be benchmarked to them on a worldwide basis. The Credit Suisse price target for the stock is $50, and the consensus is at $45. MSCI closed Monday at $43.12.

Manitowoc Co. Inc. (NYSE: MTW) announced last week that the company has refinanced some of its debt, thereby extending maturity dates from the previous 2016 and 2017 to 2018 and 2020, as well as lowering the related interest expenses. The company will also redeem some of its senior notes in February 2014. Manitowoc expects the result of the debt refinancing and bond redemption to be interest savings of about $20 million in 2014. Investors are paid a tiny 0.3% dividend. Credit Suisse has a $28 price target. The consensus figure is at $24.24. The stock closed Monday at $24.31.

State Street Corp. (NYSE: STT) is based in Boston and offers 197 exchange traded funds (ETFs) holding $413 billion in assets, second only to New York-based BlackRock’s $898 billion, according to the data. Investors receive a 1.4% dividend. Credit Suisse has an $80 price target on the stock, and the consensus is posted at $79.53. The stock closed Monday at $72.93.

The Credit Suisse top additions are hardly red-hot momentum stocks. In a market that has had a huge 2013, these kinds of names may be just what portfolios need to lower risk profiles but still allow for growth. In an election year that is sure to be contentious, lower volatility stocks may just the right addition.

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