Top Wall Street firm Oppenheimer is out with a list of its Top 32 best equity ideas for December. Each of the firm’s analysts was asked to contribute one stock idea that they think could outperform over the next 12 months. This is based on both fundamentals and current market conditions.
From this list of 32 stock picks, we used TipRanks to select 7 stocks with a Strong Buy consensus from the Street. With the market so volatile right now this consensus rating provides reassurance that the Street as a whole has a bullish outlook on these stocks. At the same time, we take a deeper look into why the firm’s analysts- many of whom have a very high ranking on TipRanks– believe that these stocks represent the most compelling investment opportunities.
Are you ready? Let’s dive in now:
- Salesforce.com Inc (NYSE:CRM)
Salesforce calls itself the world’s No. 1 customer relationship management platform. Right now, the stock is buzzing following the release of strong earnings results that beat expectations.
Business remained very solid in the third quarter, with total revenue of $3.39 billion up 26 percent year-over-year. And while guidance for the fourth quarter came in mixed, Salesforce gave very encouraging guidance for both 2019 and 2020.
“We consider CRM one of the healthiest long-term growth stories in our SaaS/applications software universe” claims five-star Oppenheimer analyst Brian Schwartz. His bullish $180 price target sees shares surging 28% from current levels.
He predicts ongoing upward revisions beyond the current consensus as “CRM is a proven market share taker that possesses disruptive products and a powerful corporate culture, and is led by a visionary CEO.”
And we can see here that the Street clearly shares Schwartz’s upbeat take on this software stock:
- XPO
XPO Logistics Inc (NYSE:XPO) is a top ten global logistics company. Its services span everything from shipping to freight brokerage to trucks and tractors.
The stock is also the top pick of Oppenheimer’s Scott Schneeberger. With a buy rating and a $114 price target, he is predicting juicy upside potential of 50%. This is down to XPO’s solid organic revenue growth and strong operational execution.
“An industry leader spanning key transportation and logistics categories, XPO possesses a compelling adjusted EBITDA/free cash flow growth story” the analyst explains.
He anticipates continued top-line growth with gradual margin expansion over 2018E-2020E, writing “we expect the tail end of the period to again be augmented by sizable, accretive acquisition contribution.”
Overall, this ‘Strong Buy’ stock boasts 7 top analyst buy ratings in the last three months. This is vs 1 hold rating. The average analyst price target stands at $114.
- EVH
Evolent Health Inc (NYSE:EVH) sells software and consulting services to help healthcare providers, like hospital systems, offer care at lower costs. This is particularly important given the ongoing shift to value-based payments systems. From a Street perspective, this is a first-class stock with a lot of potential.
In the last three months alone, we are looking at 9 top analyst buy ratings. And with an average price target of $33, analysts see prices spiking 27% in the coming months.
“We continue to be encouraged by the momentum in the transition toward risk-based reimbursement and by EVH’s position to gain from it” says five-star Oppenheimer analyst Mohan Naidu. He reiterated his buy rating with a $31 price target on November 7. Plus the recent acquisition New Century Health adds nicely to numbers and moves estimates higher for Q4.
He says: “While there is competition, we believe EVH is differentiated in its proven ability, technology offerings, service and credibility in helping organizations make the switch successfully.”
- VRTX
Global biotech stock Vertex (NASDAQ:VRTX) Pharma is a prime investing pick right now with a growing portfolio of cystic fibrosis (CF) drugs. This is a genetic disorder that causes severe damage to the lungs, digestive system and other organs in the body.
Oppenheimer’s Hartaj Singh has been bullish on the stock since June 2017. “Vertex (VRTX) reported two positive phase 3 efficacy readouts for VX-659, the first of its two triplet therapies development. The data continues to impress, with 4- week efficacy being incrementally better than phase 2 results published in the NEJM recently… We stay bullish” he wrote on November 27.
“We believe the company is positioned to deliver strong sales and earnings growth over the next five years, with the potential for even greater growth if product launches outperform and OPEX reaches steady state” Singh says.
Net-net: “This could be just the beginning of the upside story.” His price target currently stands at $200.
Enjoy the freedom to work remotely with LogMeIn Inc (NASDAQ:LOGM). The company describes itself as the world’s most reliable remote desktop tool. As well as remote services, the company also provides IT management and customer engagement solutions.
According to Top 100 Oppenheimer analyst Shaul Eyal, LOGM is a bargain buy right now.
“LOGM is becoming a compelling value play representing one of the sector’s cheaper companies” says Eyal. “With two differentiated acquisitions (GoTo and Jive) now aligned with LOGM’s longer-term strategy, we view the discount to the group as unwarranted.”
In total this ‘Strong Buy’ stock has received 4 top analyst buy ratings in the last three months. This is versus 1 hold rating. Meanwhile the $107 average price target suggests shares can soar 20% from current levels.
- HD
Home Depot (NYSE:HD) is the U.S.’s largest home improvement retailer with over 2,200 retail stores. The company has just reported much better than expected Q3 results alongside updated FY18 (Jan. 2019) guidance. In Q3, domestic comps rose an impressive 5.4% and EPS increased 36% to $2.51, easily topping Street’s $2.27.
“For some time now, we have highlighted home improvement as a bright spot within the retail sector and HD as the clear best run operator within the space” cheers top-ranked Oppenheimer analyst Brian Nagel.
He believes HD can surprise investors with solid and persistent comp and EPS upside. Nagel has a Buy rating on the stock with a $200 price target (13% upside potential).
- WCN
True this may not be the most appealing company in the world. As the name suggests, Waste Connections Inc (NYSE:WCN) deals with solid waste collection, disposal and recycling. It provides waste treatment, landfills, intermodal facilities and recovery landfills.
However, from an investing perspective the stock is certainly worth a closer look. Top Oppenheimer analyst Noah Kaye reveals why he picked WCN as his No. 1 stock here: “We believe industry dynamics will continue to support strong cash flows in WCN’s core business and return of cash to shareholders.”
Not only that but in comparison to its waste management peers, WCN is a growth play with upside potential. Kaye expects management’s history of strong execution on post-merger integration with Progressive Waste Solutions (BIN) to continue. Note that the stock boasts 100% Street support, with five buy ratings over the last three months.