Investing

Deutsche Bank's U.S. Stock Selection Best Buy Ideas

As the rally rolls on toward the holiday season, many of the Wall Street firms we cover at 24/7 Wall St. are pulling out their best stock ideas in hopes of bringing clients a very strong finish for 2014. A new Deutsche Bank report from the firm’s quantitative strategies team highlights 20 of the current best buy ideas. Using bottom up analysis, the firm runs reams of data through the computers to come up with the stock selections.

We screened the stocks for those that fit in the sectors that the Deutsche Bank team feels will most likely outperform going forward. It should be noted that quantitative profiles are computer driven and don’t always fall within the firm’s own analyst research coverage.

Actavis PLC (NYSE: ACT) is rated as a Buy at Deutsche Bank. The company is a top generic-drug maker and continues to see unprecedented growth. A key element to its growth has been the so-called patent cliff, a period when many of the world’s best-selling drugs are losing patent protection. In fact, Actavis has specifically mentioned in the past the new generic introduction of drugs such as Suboxone, Lidoderm and Concerta as growth drivers. Some analysts on Wall Street think this Irish-domiciled company could have earnings per share as high as $20 by 2017.

The Deutsche Bank price target for the stock is $277. The Thomson/First Call consensus price target is $266.89. Shares closed Wednesday at $247.91.

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Bunge Ltd. (NYSE: BG) missed third-quarter earnings expectations, and the stock reacted as one would expect. The company has a deep reach and long history in Brazil and Argentina, where it processes grains for local consumption and exports them to consumers as far away as China. South America is the world’s top exporter of soybeans and second-largest source of corn. After a very slow year, in which the stock has underperformed, investors may catch a nice upswing as the global economy improves in 2015.

Bunge investors are paid a 1.6% dividend. The consensus price target is $90.56, and shares closed Wednesday at $89.21.

CenterPoint Energy Inc. (NYSE: CNP) beat on revenues this week and reaffirmed 2014 guidance for earnings per share. The company is a domestic energy delivery firm that includes electric transmission and distribution, natural gas distribution and energy services operations. CenterPoint serves more than 5 million metered customers, primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. The company also owns a 55.4% limited partner interest in Enable Midstream Partners, a publicly traded master limited partnership it jointly controls with OGE Energy, which owns, operates and develops natural gas and crude oil infrastructure assets.

CenterPoint shareholders are paid a very solid 3.8% dividend. Deutsche Bank has a rating of Hold on the stock and a $26 price target. The consensus target is higher at $27.09. Shares closed trading at $25.13.

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Medivation Inc. (NASDAQ: MDVN) is a stock many Wall Street analysts are very bullish on. They attribute the higher number to higher forecast milestone payments from existing partners. Medivation has a top prostate cancer drug that analysts feel would be a valuable acquisition. Xtandi is a highly leverageable likely blockbuster product in prostate cancer, a very large market segment with potential upside in breast cancer. The company’s ongoing partnership with Astellas suggests a natural buyer, but other third parties looking to grow product sales would also be interested.

The consensus price target Medivation is $108.44. The stock finished trading Wednesday at $102.77.

Pilgrim’s Pride Corp. (NASDAQ: PPC) third-quarter earnings came in above estimates, however revenues fell short. The company is one of the largest chicken companies in the United States, Mexico and Puerto Rico and is engaged in the production, processing, marketing and distribution of fresh, frozen,and value-added chicken products to retailers, distributors and food service operators. Pilgrim’s Pride has also seen rising estimates of 10.8% for the current fiscal year over the past month and has delivered average positive earnings surprises of 9.44% in the past four quarters.

The consensus price target for the stock is posted at $33. Shares closed on Wednesday at $31.76.

ALSO READ: Analysts Stepping Over Themselves for Alibaba Price Target Hikes

By screening for internal metrics and sector strength, quantitative programs often rule out analysts bias. While these companies may not all be momentum titans, they are all very well suited for long-term growth portfolios that have a higher than average risk tolerance.

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