Here is a list of the cheapest names that hit the Jefferies screens that their various sector analysts like.
Apple Inc. (NASDAQ: AAPL) remains a top stock on the inexpensive radar screen. Excitement over the new iPhone 6 is starting to gain traction as rumors of a larger screen and other new improvements are getting the Apple nation stirred up. Plus with a huge earnings beat, a stunning seven-for-one stock split and an increased dividend and share buyback, the company seems right back on its game. Trading at just 12 times forward earnings, the stock remains a solid buy for investors. Shareholders are paid a 2.3% dividend. The Thomson/First Call consensus price target for Apple is $614, and the stock closed Friday at $571.94.
Aetna Inc. (NYSE: AET) makes the list, and it trades at just touch over 14 times earnings. The company is one of the nation’s leading diversified health care benefits companies, serving an estimated 44 million people while offering a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities. Investors are paid a 1.2% dividend. The Jefferies price target is $87, and the consensus estimate is at $82.56. Aetna closed Friday at $71.25.
Capital One Financial Corp. (NYSE: COF) has continued running its string of quirky commercials to grow its credit card business, and it trades at a low 10.26 times earnings. Capital One also offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. With more than 900 branches around the United States, the company has more than $206.9 billion in assets. Investors are paid a 1.6% dividend. The consensus price target is at $83.04. The stock closed Friday at $73.34.
Fifth Third Bancorp (NASDAQ: FITB) is a top regional banking name that makes the grade at Jefferies, and it trades at a low 10.82 times earnings. The company cleaned up some headline risk last year when it settled an SEC accounting charge issue. Plus, last year the bank reduced its common shares outstanding by 3% as it repurchased a net $912 million in shares. Investors receive a 2.3% dividend from this leading Midwest bank. The consensus price target is $24.09. Fifth Third closed Friday at $21.96.
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Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) was battered last year as investors fled mining companies. The company is entering the U.S. oil and gas space, which could truly make it a powerhouse, while commodities pricing in its prime mining businesses have increased substantially this year. Global growth also may provide a tailwind for the stock, which trades at a low 12.25 times earnings. Investors are paid a 3.7% dividend. Jefferies has a $45 price target, and the consensus target is $39.78. The stock closed Friday at $34.01.
Intel Corp. (NASDAQ: INTC) is another buy-rated name from Jefferies. The stock has been caught in a ratings tug-of-war on Wall Street, but many firms believe the Silicon Valley giant is poised to breakout of its multiyear slump. A new commitment to smartphone and mobile applications, combined with a possible resurgence of PC growth this year, may make Intel one of the best large cap value stocks to buy. Intel trades at a very low 13.5 times forward earnings. Investors are paid a solid 3.4% dividend. Jefferies has a $32 price target, while the consensus target is $26.79. Intel closed Friday at $26.26.
Wells Fargo & Co. (NYSE: WFC) is another top financial name to make the Jefferies list. The yield curve typically steepens in an improving economy, which many on Wall Street currently anticipate, and Wells Fargo may be a big beneficiary when it does. Wells Fargo is slowly, but surely becoming one of the biggest mortgage lending companies in the United States, in addition to its normal banking and brokerage businesses. It also remains a top Warren Buffett holding. Investors are paid a 2.5% dividend, and the consensus target is at $52.01. Wells Fargo closed Friday at $49.59.
Needless to say, the market volatility has spiked, and it has spooked some investors. Jefferies is clearly on to something that makes sense. Buying value-priced big cap stocks may be an outstanding plan for the rest of the year, as the economic growth not only here, but around the world, becomes more clear.
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