Investing

Jefferies Out With 4 Sizzling Growth Stock Buys for the Fall

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Increasingly, the companies that we cover on Wall Street are starting to agree that while the future is still reasonably bright for the U.S. economy, it may be one of stock market gains that are much lower than the norm has been over the past 10 years. When that is the case, then investing strategies often shift from indexing to a more disciplined stock-picking routine, and that’s when investors need solid growth ideas.

Jefferies highlights the firm’s top growth stocks to buy each week, and this week is no exception. While these companies are better suited for accounts that have a higher risk tolerance, they all make good sense now, and all have outstanding upside potential. We found four that look extremely good now, and they are among Jefferies top U.S. growth calls for this week.

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Edwards Lifesciences

This company pioneered the artificial heart valve, and it could be poised for big growth. Edwards Lifesciences Corp. (NYSE: EW) provides products and technologies to treat structural heart disease and critically ill patients worldwide. The company offers transcatheter heart valve therapy products, comprising transcatheter aortic heart valves and their delivery systems for the nonsurgical replacement of heart valves.

The company also provides surgical heart valve therapy products, such as pericardial valves for aortic and mitral replacement, and minimally invasive aortic heart valve system, as well as tissue heart valves and repair products, which are used to replace or repair a patient’s diseased or defective heart valve.

The company’s acquisition of privately held CardiAQ a few years ago has proven to be a very successful addition. CardiAQ has human implants of transcatheter mitrial valves, and Edwards is focused on the mitrial valve opportunity after its very strong success in aortic valves.

The company has also had tremendous success with transcatherter valve replacement. These are rapidly gaining favor in the medical community for use in those patients who are deemed unsuited for open heart surgery, and they are a fast-growing revenue stream for the company.

The Jefferies price target for the stock is $255, up recently from $245, and the Wall Street consensus target price was last seen at $215.03. The stock closed trading on Friday at $219.66 per share.

Constellation Brands

If there is any company with products that stay in style, it is this one, which only has 7% foreign sales. Constellation Brands Inc. (NYSE: STZ) is a leading global producer and marketer of beverage alcohol. Its wide-ranging portfolio spans wine, spirits and imported beer.

The company is one the world’s largest wine companies overall and is the largest global premium wine company. Key brands include Robert Mondavi, Clos du Bois, Blackstone, Arbor Mist, Black Velvet and SVEDKA vodka. It also owns 100% of the rights to brew, market and sell Modelo’s Mexican beers in the United States.

The company made a gigantic $3.8 billion investment in cannabis company Canopy Growth last year to increase its holdings in the company. The record investment reflects a world in which marijuana has become ubiquitous as its counterculture stigma fades.

Constellation Brands pays investors a 1.65% dividend. Jefferies has a price target of $270 for the shares, while the posted consensus target is $226.95. The stock closed trading at $205.10 a share on Friday.

IAC/InterActiveCorp

This is a top Jefferies internet pick with solid upside to the target price. IAC/InterActiveCorp (NASDAQ: IAC) operates a diverse collection online media assets ranging from search to personals with, Ask.com search and Match.com personals driving the bulk of its revenue and profits. The company generates revenue from a combination of advertising (both search and display), subscriptions and transactions.

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The 2017 merger between Angie’s List and IAC/InterActiveCorp Home Adviser was well received, as the company was combined with HomeAdvisor, IAC’s home services marketplace. The Jefferies analysts are very positive on the company and noted this in a report:

We explored the potential strategic next steps for IAC. While a Match.com distribution could potentially narrow the sum-of-the-parts discount, we point out that IAC shares have underperformed during past spin announcements. That said, we do believe a spin followed by M&A is the most likely scenario. While we remain positive on the IAC thesis long-term, we acknowledge that the stock may trade sideways in the near-term until more clarity emerges.

The $300 Jefferies price target compares with the $299.80 consensus target price. The shares ended last week trading at $230.95 apiece.

LivePerson

The off-the-radar tech play makes sense for aggressive accounts. LivePerson Inc. (NASDAQ: LPSN) engages in the provision of mobile and online messaging solutions. It operates through two segments.

While the Business segment enables brands to leverage intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies, the Consumer segment involves in facilitating online transactions between independent service providers and individual consumers seeking information and knowledge for a fee via mobile and online messaging.

The analysts noted this in the report.

We visited the company headquarters last week and met with management. While first half 2019 revenue growth was 15%, we expect it to accelerate into year-end and 2020, and highlight that the company expects to have ~100 sales reps by year-end. In addition, while Live Person has made strong inroads in the conversational part of the market, we continue to see significant oppty in driving m-commerce through messaging channels.

Jefferies has set its price objective at $45. The posted consensus price objective is $41.79, and the stock was last seen changing hands at $38.17 a share.

These four stocks all offer investors strength in their specific industries, as well as the ability to avoid high-flying disasters. All these stocks are suitable for growth accounts with some degree of risk tolerance.

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