Investing

3 Wedbush Best Ideas Stocks That Had a Big March and Q1

Lee Jackson

Published: April 5, 2016 10:40 am

Last Updated: January 13, 2020 11:08 am

All the top Wall Street firms we cover have lists of their highest conviction stocks for their institutional and high net worth customers. Typically they report the results on a regular basis, and often that is monthly. With the first quarter over and the second quarter underway, we were very interested to see how some of the top stocks picks around Wall Street are doing.

A new research report from top boutique firm Wedbush reveals the results for March and the first quarter for the stocks on the firm’s Best Ideas list. We screened the list and found three top stocks that had a great quarter and month of March. All remain rated Buy at the firm.

Covanta

This company had a great start to the year and also has seen insider buying over the past year. Covanta Holding Corp. (NYSE: CVA) is a world leader in providing sustainable waste and energy solutions. Annually, its modern energy-from-waste facilities safely convert approximately 20 million tons of waste from municipalities and businesses into clean, renewable electricity to power a million homes, and it recycles approximately 500,000 tons of metal. Through a vast network of treatment and recycling facilities, Covanta also provides comprehensive industrial material management services to companies seeking solutions to some of today’s most complex environmental challenges.

The company’s CEO, Stephen Jones, recently said investors have historically been confused by the waste-to-energy supplier’s business model but are coming around. “Two thirds of our revenue comes from the waste side of our business, so I think that has started to become clearer to investors as time goes on” said Jones. “But historically we have traded more like an energy company and that is starting to switch over.”

The stock was up 21.03 % in March and 8.84% year to date. Covanta shareholders are paid a 6.02% dividend. The Wedbush price target for the stock is $21, and the Thomson/First Call consensus target is $17.77. Shares closed Monday at $16.61.

Lululemon Athletica Inc. (NASDAQ: LULU) designs, manufactures and distributes athletic apparel and accessories for women, men and female youth. The company offers pants, shorts, tops, and jackets for healthy lifestyle activities and athletic pursuits, such as yoga, running and general fitness, as well as dance-inspired apparel for female youth. It also provides fitness-related accessories, including bags, socks, underwear, yoga mats and water bottles.

The company sells its products through a chain of corporate-owned and operated retail stores; a network of wholesale channel, such as yoga studios, health clubs and fitness centers; and outlets and warehouse sales; as well as directly to consumer through e-commerce sites. As of February 1, 2015, it operated 302 corporate-owned stores under the lululemon athletica and ivivva athletica brand names in the United States, Canada, Australia, New Zealand, the United Kingdom and Singapore.

The stock was up 7.94% in March and a whopping 29.05% in the first quarter. The $80 Wedbush price target is well above the consensus target of $69.34. Shares closed on Monday at $67.60.

Molina Healthcare

Molina Healthcare Inc. (NYSE: MOH) provides Medicaid-related solutions to meet the health care needs of low-income families and individuals and to assist state agencies in their administration of the Medicaid program. Through the company’s locally operated health plans in 11 states across the nation, it currently serves more than 3 million members.

The company posted solid fourth-quarter numbers as earnings beat estimates and revenues slightly lagged expectations. The company’s Premium revenues and Service revenues improved nearly 34.2% and 96.3%, respectively, both on a year-over-year basis. In addition, Molina Healthcare’s investment income soared a massive 200% year over year to $6 million. Premium tax revenues also increased 14.3% to $104 million in the fourth quarter.

The stock was up 3.95% in March and 7.25% for the first quarter. Wedbush has an $82 price target, and the consensus target is posted at $79.79. Shares closed Monday at $64.45.

The Wedbush winners for March and the first quarter could continue to be big winners if the market rally can endure. All these stocks make good sense for aggressive growth portfolios and should be watched closely for first-quarter earnings results.