A new report from Credit Suisse has a long list of top-performing stocks that are very likely window-dressing candidates. The irony in this tactic is that the best performers end up doing better as the lousy stocks are tossed out due to increased year-end buying. We scanned the list for five candidates that could see moves higher as a result of this buying.
Apple Inc. (NASDAQ: AAPL) has had just about everything this year shareholders would have asked for: a seven-for-one stock split, a huge stock buyback and the magnificent debut of the two new iPhone 6 models, which included a strong push into the Chinese market. The company also had an increase in the dividend paid to shareholders, the announcement of the upcoming Apple Watch and so much more. The firm truly cemented its place in the pantheon of tech stocks, and there is no reason to believe that 2015 can’t be another outstanding year.
Apple shareholders are paid a 1.7% dividend. The Thomson/First Call consensus price target for the tech giant is $116.45. Shares closed trading on Wednesday at $108.86.
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Chipotle Mexican Grill Inc. (NYSE: CMG) has become the momentum trader’s dream stock, and it has absolutely eviscerated short sellers trying to time the downfall of the company’s huge momentum. Chipotle has more than 1,500 restaurants worldwide and is planning on opening up to 195 new ones this year. Like many companies, Chipotle has also spoken favorably to the idea of increasing its stock buyback program, which shows the company’s confidence in the growth of its business. A stock split could also be in order for the stock in 2015.
The consensus price target for this rampaging restaurant chain is a gigantic $717.82. The stock closed trading Wednesday at $642.59.
Facebook Inc. (NASDAQ: FB) posted solid third-quarter earnings, but the stock took a dip when the company reported huge spending on initiatives going forward, an issue that worried investors that margins could be cut. With mobile revenue and advertising numbers skyrocketing, the company has been a stellar performer this year, and it is a likely window-dressing candidate. With over a billion registered users around the world, Facebook’s e-commerce potential is significant and growing larger monthly, with seemingly low retailer penetration in terms of engaging with more advanced targeting methods such as Custom Audiences and “Lookalike” Audiences. Numerous Wall Street analysts have pointed out that as more retailers become familiar and comfortable with these techniques, Facebook could see higher demand and pricing for these ad products.
The consensus price target for the social media giant is a large $87.38, with many targets much higher. Shares closed trading at $74.83.
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Southwest Airlines Co. (NYSE: LUV) has gone from industry underdog to an industry leader, and it is another stock that screens favorably at Deutsche Bank. With the domestic market showing good strength, and the pricing environment looking very solid for the rest of the year, revenues should stay strong. Tumbling jet fuel prices, which is almost 30% of carrier cost, is a plus for investors. Southwest is also busy expanding routes and adding new gates at key airports. With the restrictive Wright amendment now history at the airline’s main hub in Dallas, the company can now expand routes all over the country to add additional revenue and service.
Southwest investors receive a small 0.7% dividend. The consensus price target is $39.69, and the stock closed at $36.75.
Nike Inc. (NYSE: NKE) makes the list as top consumer discretionary name, and it absolutely blew out earnings in the most recent quarter. The company also has huge potential upside from a turnaround in its China business, improvements in gross margins and continued innovation-driven market share gains in both basketball and running footwear. With one of the most recognizable brands in the world, long-term investors may do very well adding shares here despite the big move up in the stock this year. A big holiday shopping season could also boost earnings for the company.
Shareholders are paid a 1.01% dividend from the sporting apparel giant. The consensus price target is $94.67, but Nike closed right there at $94.68.
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Even though these stocks have overachieved this year, they still have strong potential upside near-term and for the future. Longer term investors could safely scale in some shares now, while traders could add full positions and look to sell into any year-end rally.
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