We have held the position here at 24/7 Wall Street that the recent sell-off could possibly follow a similar pattern of other sell-offs over the years by retesting the lows set in August. Sure enough, last week the S&P 500 came within five points of the 1,867 low printed on August 25. With a big day last Thursday and a huge reversal on Friday, as well as a strong Monday to open this week, the basis for a solid fourth quarter rally may be getting put in place.

A new research piece from the technical team at Oppenheimer notes something that has been in place for a while now. The overall sentiment in the market is extremely pessimistic, which is very bullish. Plus the fourth quarter often offers seasonal upside, especially in a year when all the indexes are still negative, and Oppenheimer says it may be smart to buy any weakness in the coming weeks.

We screened the company’s top 50 Buy Ideas and found four that look very solid now and are rated Outperform at Oppenheimer.

Acuity Brands

This company is a nice side play on the continuing growth in the housing market. Acuity Brands Inc. (NYSE: AYI) is a top stock to buy in the next-generation lighting space. The company is a North American market leader and one of the world’s leading providers of lighting solutions for both indoor and outdoor applications.

With fiscal year 2014 net sales of $2.4 billion, Acuity Brands lighting solutions are sold under various brands, including Lithonia Lighting, Holophane, Peerless, Gotham, Mark Architectural Lighting, Winona Lighting, Healthcare Lighting, Hydrel, American Electric Lighting, Carandini, Antique Street Lamps, Sunoptics, RELOC Wiring Solutions, eldoLED and Acuity Controls.

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Light emitting diodes (LEDs) accounted for 40% of the company’s sales in the fourth quarter of 2014, up from 4% three years earlier. As manufacturing costs have dropped for LED technology, profit margins for the company should be going up. Acuity also benefits from the housing and commercial building recovery; sales rose 15% to $2.4 billion in the fiscal year that ended in August 2014, and earnings climbed 20% to $3.97 per share.

Investors are paid a tiny 0.3% dividend. The Oppenheimer price target for the stock is $210. The Thomson/First Call consensus price target is $212. The shares closed Tuesday at $176.38.
Fortinet

Fortinet Inc. (NASDAQ: FTNT) is well liked on Wall Street and analysts have pointed to specific reasons for the bullish posture:

• The large push into enterprise and OMP
• The impact of the improved inventory management
• The new “Easy 4” pricing model released earlier this year that involves a new bundled product sales strategy

The company’s fast, secure and global cybersecurity solutions provide broad, high-performance protection against dynamic security threats while simplifying the IT infrastructure. They are strengthened by the industry’s highest level of threat research, intelligence and analytics. Unlike pure-play network security providers, Fortinet can solve organizations’ most important security challenges, whether in networked, application or mobile environments, be it virtualized/cloud or physical.

Fortinet recently signed a deal with French company Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, to reinforce its cybersecurity services portfolio, leveraging Fortinet products to help reduce customer cybersecurity costs and increase the resilience of clients’ infrastructure and applications. This alliance allows enterprise organizations to benefit from the combination of Fortinet’s expertise in innovative and effective security products and Capgemini’s cybersecurity services, on a global scale.

The Oppenheimer price target is $55, while the consensus target is $51.50. Shares closed Tuesday at $43.45.

Global Payments

This company participates in the fast-growing payments arena. Global Payments Inc. (NYSE: GPN) is a leading worldwide provider of payment technology services that delivers innovative solutions driven by customer needs globally. The company’s partnerships, technologies and employee expertise enable them to provide a broad range of products and services that allow our customers to accept all payment types across a variety of distribution channels in many markets around the world.

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Global payments recently announced the ability to offer its merchants in the United States the ability to accept Samsung Pay, a simple and safe mobile payment service that works almost anywhere you can swipe or tap your card. As a Samsung Pay-qualified payment provider, Global Payments’ robust suite of payment solutions is fully enabled for acceptance, allowing merchants to offer their customers the convenience of Samsung Pay.

The Oppenheimer price target for the stock is $130 and the consensus is at $120.18. The shares closed trading on Tuesday at $115.37.

Omnicell

This company has been mentioned as a potential takeout candidate. Omnicell Inc. (NASDAQ: OMCL) is a leading supplier of comprehensive automation and business analytics software for patient-centric medication and supply management across the entire health care continuum, from the acute care hospital setting to post-acute skilled nursing and long-term care facilities to the home. One of the major health care providers could easily have an interest in the company.

The company reported earnings last month that grew 7.4% year over year but missed the Wall Street estimate. The company noted that 47% of its orders in the quarter were due to new and competitive conversion customers making first time installations. That is decidedly higher than its 10-year historical trend ranging between 33% and 40%. On a segmental basis, during the quarter, Omnicell’s Automation and Analytics segment’s revenue increased 4.7%. The company encouragingly noted that, 31% of its orders in this segment were from customers making first-time installations of Omnicell systems.

The Oppenheimer price target is $40, and the consensus is at $40.71. Shares closed Tuesday at $31.01.

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While we already have seen a sharp trading bounce over the past few days, this could lead to some quick trading profits and some backing and filling. However, with the historical fourth-quarter success over the years, some timely buying now may reap some solid gains.

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