UBS Makes First Big 2016 Changes to Equity Focus List

By Lee Jackson Updated Jan 13, 1:34PM EST · Published Feb 5, 11:35AM EST

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UBS Makes First Big 2016 Changes to Equity Focus List — © Thinkstock

With a horrible month to start the year, and February ushering in the same heightened volatility, many of the firms that were cover on Wall Street are making some adjustments and tweaking their lists of top stocks for clients, and who can blame them? With financial pundits hollering recession and interest rates trending lower, it makes sense to review top stock picks and make some adjustments.

The analysts at UBS are no exception, and they are making some changes to the firm’s prestigious Equity Focus list. The UBS Equity Focus list employs what they call the firms House View, Fundamentals, Technicals, Thematics and Quantitative work to determine the stocks that are put into the portfolio. Changes are made on a regular basis as market action and pricing dictates.

High-profile software company Adobe Systems Inc. (NASDAQ: ADBE) and top real estate investment trust (REIT) Essex Property Trust Inc. (NYSE: ESS) were added to the Equity Focus list.

And UBS removed Ameriprise Financial Inc. (NYSE: AMP) and Anadarko Petroleum Corp. (NYSE: APC) from the Equity Focus list.

Adobe Systems

This old-school software company operates in three segments. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content.

The Digital Marketing segment offers solutions for how digital advertising and marketing are created, managed, executed, measured and optimized. This segment provides analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management solutions, as well as video delivery and monetization to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers and chief revenue officers.

The Print and Publishing segment offers products and services, such as eLearning solutions, technical document publishing, Web application development and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers printing businesses.

Adobe is also reasonably safe route for investors looking to own a company with marketing automation products, which have become huge.

The Thomson/First Call consensus price target for the stock is $103.83. The stock ended trading on Thursday at $86.36 per share.
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Essex Property Trust

This fully integrated REIT acquires, develops, redevelops and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 244 apartment communities, with an additional nine properties in various stages of active development.

In 2014, Essex acquired BRE properties, making it the only pure play multifamily REIT in its core markets. These core markets have experienced job growth that has averaged more than 1.5% over national averages over the past several years, as well as 3.5% rental growth. Rents there are also projected to outpace national averages by more than 3.5% over the next five years. The UBS team believes that Essex is positioned to take advantage of strong multifamily demand in this market.

Essex shareholders are paid a 2.72% distribution. The consensus price target is posted at $251.02, and the shares closed most recently at $210.92.
Ameriprise Financial

Ameriprise Financial provides a range of financial products and services in the United States and internationally. Its Advice & Wealth Management segment offers financial planning and advice, as well as brokerage services primarily to retail clients through its advisors. Its Asset Management segment provides investment advice and investment products to retail, high net worth and institutional clients through unaffiliated third party financial institutions and institutional sales force.

In recent years Ameriprise has recruited heavily from the top Wall Street firms ranks. But the UBS team feels that the technical view on the company is bearish.

Ameriprise Financial investors are paid a 1.7% dividend. The consensus price target is $116.10. The stock closed Thursday at $85.47, down almost 40% in the past year.

Anadarko Petroleum

Anadarko Petroleum operates through three segments. The Midstream segment provides gathering, processing, treating and transportation services to Anadarko and third-party oil, natural-gas and natural gas liquids (NGLs) producers, as well as owns and operates gathering, processing, treating, and transportation systems in the United States.

The Oil and Gas Exploration and Production segment explores for and produces natural gas, oil, condensate and NGLs. The Marketing segment markets oil, natural gas and NGLs in the United States; oil and NGLs internationally; and anticipated liquefied natural gas production from Mozambique.

This top stock is down a stunning 65% since May of 2015, and the UBS analysts again cite a bearish technical view as the reason for removal.

Anadarko shareholders are paid a 2.61% dividend. The consensus price target for the stock is $58.81. Shares closed Thursday at $41.36 apiece.
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UBS is seeking to get just the right pieces to fit in and help the portfolio. We will continue to monitor all the moves in the Equity Focus list, as there will certainly be additional changes throughout 2016.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.