Investing

The 24/7 Wall St. Top 6 Large Stocks of 2014

24/7 Wall St. has decided to feature its Top 6 Large-Cap Stocks of 2014 ahead of Christmas this year. These stocks have been stellar performers, but they have obviously gone above and beyond the performance of the market. They also exceeded prior expectations handily.

In compiling the “top stocks of the year” list, simply gathering the top performing stock in each sector was not the goal. This was meant to be a review of large companies with market values in excess of $10 billion, as well as companies that have either turned around or that have gone above and beyond larger companies or forces that were working against them. We have already featured 9 large stocks that doubled so far this year.

24/7 Wall St. has identified why each of the six stocks was our top pick of 2014. They include Electronic Arts, Intel, Kinder Morgan, Palo Alto Networks, Southwest Air and Under Armour.

This limitation to six companies may seem as though it left out many great stocks, but those will be featured for industry picks in the coming days and weeks. We also took a look at the performance, where shares have been and what analysts are looking for head.

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Electronic Arts Inc. (NASDAQ: EA) had been written off for dead when the recession and explosion of smartphone and tablet freemium games took off. One concern may be around the stock being slightly above the consensus analyst price target, but the reality is that analysts were behind on the rally much of the time it doubled. The new PS4 and Xbox One refresh cycle has helped handily, but so have new launches like Titanfall and existing franchises like Madden NFL, Battlefield, Dragon Age, Sims, Star Wars and so on. EA is also valued at about 20 times next year’s earnings expectations, and its stock just hit a 52-week high — make that a high not seen since 2008.

Shares of Electronic Arts were up 107% year-to-date in 2014. At $47.46, the stock has a consensus analyst price target of $45.24 and a 52-week trading range of $21.25 to $47.68. EA now has a market cap of over $14 billion again.

Intel Corp. (NASDAQ: INTC) is not technically the best performing chip stock of 2014, but its turnaround and raw size make the move the most impressive of the bunch. Intel was supposed to be the old world PC processor giant that was getting left behind by the smartphone and tablet revolution. The death of the PC was overblown, and not winning the Xbox One and PS4 processor was overcome by its core business. Intel closed out 2013 at $25.96, and at the start of this year analysts were saying that Intel was overvalued and should drop about 5%. Guess which stock is the best performing of the 30 Dow stocks and is only just now getting the recognition it should have been given? The company even delivered on a dividend hike that was not widely expected by dividend investors.

Shares of Intel were last seen up 44.5% at $36.37 year-to-date. The consensus analyst price target is $35.65, and the 52-week trading range is $23.50 to $37.90. The market cap is about $176 billion.

ALSO READ: The Worst Performing Large Stocks of 2014

Kinder Morgan Inc. (NYSE: KMI) deserves top billing for the oil and gas sector, even if it is on the toll road and infrastructure model. By completing a roll-up of three MLP units back into a corporation, Kinder Morgan is now a top energy player in America. The company has maintained its dividend growth outlook for 2015, and it managed to perform well despite the plunging oil prices. Fortunately, it is largely insulated from oil prices, and the roll-ups drove down the company’s overall cost of capital. If oil prices remain weak, even the great Kinder Morgan may have a hard time driving massive interest in 2015. Still, its 4.5% yield is now much better than traditional oil companies, and its tax structure is now much cleaner and easier to understand for investors.

Shares of Kinder Morgan were up 21% at $41.63 year-to-date. The consensus price target is $45.69, and the 52-week trading range is $30.81 to $42.49. Kinder Morgan’s market cap is $42 billion.

Palo Alto Networks Inc. (NYSE: PANW) is currently the top dog when it comes to intrusion and hacking detection. Its name comes up routinely any time there is a serious hack attack or data breach. Investors need to consider that it is valued at over 150 times operating income, and the dominance of data security stocks seems to come and go through time — just ask Symantec. Still, revenue growth is expected to be over 40% for its current year and up over 30% next year. Palo Alto Networks also has said that many companies, particularly banks, are simply way behind the curve and are spending far too little to protect their data.

Shares of Palo Alto were up 114% year-to-date. At $123.80, the data security stock has a consensus analyst price target of $125.68 and a 52-week trading range of $54.70 to $124.95. Analysts have chased this consensus price target higher and higher throughout 2014. It also now has a market cap of $10 billion.

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Southwest Airlines Co. (NYSE: LUV) is the top performing airline stock of 2014. Sure, the sector has been a huge beneficiary of lower oil prices. Southwest might have even been expected to be hurt by its historical hedging activities, but that has not been the case. What really stands out is that Southwest has been the most static in pricing for its additional services at a time when its competitors are looking for every extra add-on cost they can find. Maybe Southwest isn’t always the lowest cost carrier on an absolute basis, but it is still a great value with large international expansion ambitions.

Shares of Southwest were up 115% at $40.26 year-to-date. The stock has a consensus price target of $48.19. Its 52-week trading range is $18.57 to $42.94, and the market cap is $27 billion.

Under Armour Inc. (NYSE: UA) was the second best performing stock of the larger apparel players valued over $5 billion, and it was the best in class for the S&P 500 apparel and textile players. The athletic apparel company has been gaining in market share, and revenues are expected to be up 30% in 2014 and another 24% or so in 2015. Where this rising giant stops is anyone’s guess, and it is obviously the one athletic apparel player that the big boys like Adidas and Nike wish they had acquired years ago. 24/7 Wall St. was not alone in naming Under Armour one of its top stocks of 2014 — Yahoo! Finance selected Under Armour its outright stock of the year.

Shares of Under Armour were up 58% at $69.09 year-to-date. The stock has a consensus price target of $72.43 and a 52-week trading range of $40.98 to $73.42. The market cap is $14 billion.

ALSO READ: 9 Big Stocks That Doubled in 2014

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