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3 New Jefferies Top Value Stocks to Buy

Combine a little Greek default pressure and toss in some interest rate worries and bond selling, and you have a good mixture for volatility. With the stock market feeling very overbought and perhaps at a tipping point, it makes sense for stock investors to roll out of some growth companies and think value. A new research note from Jefferies highlights the top values stocks the firm recommends for investors to buy this week.

The Jefferies team is looking at stocks that are not really affected by turmoil in Greece, have big currency headaches or are momentum winners looking to take a steep drop during a sell-off. They have pinpointed three companies that make good sense for long-term investors.

Community Health Systems

This company is a top value buy at Jefferies and is well liked across Wall Street. Community Health Systems Inc.’s (NYSE: CYH) large asset base provides geographic diversification and scale advantages. This is one of the stocks that many analysts see as most levered to the states where Medicaid expansion could be the greatest. It is also more exposed to health care reform than almost any other company in the sector, and coverage expansion under ACA reform may be providing a substantial boost to earnings in 2015 and beyond.

The Jefferies team points out that the stock trades at a larger discount to industry peers, and they think that earnings multiple has room to expand and push the stock price higher. They also point out that company management was optimistic that it can deliver positive admissions growth every quarter this year, which is a significant given the pressure on volumes for almost the past eight years.

The Jefferies price target for the stock is $65. The Thomson/First Call consensus figure is lower at $62.95. The stock closed Tuesday at $55.17.

ALSO READ: Merrill Lynch Adds New Stocks to Buy to Prestigious US 1 List

Deutsche Bank

This top European bank has been in a massive state of flux, and it may be an outstanding buy now. Deutsche Bank A.G. (NYSE: DB) is a leading client-centric global universal bank serving 28 million clients worldwide. Deutsche Bank provides commercial and investment banking, retail banking, transaction banking and asset and wealth management products and services to corporations, governments, institutional investors, small and medium-sized businesses, and private individuals. It is Germany’s leading bank, with a strong position in Europe and a significant presence in the Americas and Asia Pacific.

With the recent departure of the co-CEOs and the announcement of John Cryan as the new CEO, the Jefferies team feels the bank is in much better shape at the top. Cryan delivered outstanding result at UBS, where he consistently underpromised and overdelivered, which is far different from the outgoing management team. This positive change at the top removes a ton of headline risk for the stock.

Deutsche Bank shareholders receive a solid 2.67% dividend. Jefferies has a $41.17 price target, and the consensus target is much lower $27.72. Shares closed Tuesday at $31.21.

Prudential Financial

This company is a top financial services and insurance company that also makes the Franchise Picks list at Jefferies. Prudential Financial Inc. (NYSE: PRU) has more than $1 trillion of assets under management as of December 31, 2014, with operations located in the United States, Asia, Europe and Latin America. Prudential’s strong and diverse sales force helps individuals and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management.

The company holds its analysts day soon, and the Jefferies team thinks that stock buybacks will be a big focus at the event. They also point out the company is on track for $1 billion in buybacks for 2015, and they estimate $1.5 billion for next year. They also see a very solid return on equity of 17%.

Prudential shareholders are paid a 2.62% dividend. The Jefferies price target is $100, and the consensus target is $95.53. Shares ended the day Tuesday at $89.73.

ALSO READ: 4 Health Care Stocks That Are Very Likely Buyout Targets

No point in taking any chances now, and the Jefferies top value buys are just the ticket: strong growth ideas with far less volatility attached to the companies.

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