Noteworthy Upgrades That Could Carry Into the New Year
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With investors preparing for a new year, re-diversification will be a hot topic. A new year brings new hope and a chance to start over. With that being said, I am looking at noteworthy analyst calls that ended 2012. These were notes issued to shareholders that could be vital in determining an investment decision.
- BMO has been one of Facebook’s most critical firms, with a price target of just $15. But on Monday, the firm went from a “Sell” rating to a “Buy”, and bypassed the “Hold” rating, which is uncommon. The firm more than doubled its price target, giving Facebook a target of $32. The change in perception is newsworthy by itself, as the analyst definitely had to swallow his pride. However, a re-acceleration of ad spending from large brands that are returning to advertise on mobile has sparked the upgrade. If the firm is correct, and Facebook is seeing this “re-acceleration” then the firm might actually be correct with its target.
- QIHOO had performed well for most of 2012, and some had begun to whisper that the stock may be approaching resistance. But on Monday Wedge Partners said that it’s encouraged by the company’s search ad deal with Google. Furthermore, the firm predicts that it will generate $140 million from this relationship in 2013. If true, then QIHOO would in fact trade higher, as it rallied 8.64% on Monday following the report. But other analysts, including Citron Research, have not been as bullish, meaning a proper assessment of the positives and negatives should occur.
- According to Argus, shares of FedEx are cheap. The firm gave FedEx a $105 price target on Monday based on better-than-anticipated online holiday sales. The firm believes the sales will contribute to a better-than-expected Q42012 and start of 2013. Therefore, this call suggests immediate upside potential.
- Atlantis Equities turned slightly more bullish by upgrading the stock to “neutral”. The upgrade was due to the FDA approval of the company’s anti-clotting drug, Eliquis, last week. However, the firm expects BMY to trade flat in 2013, most likely because of the patents that the company has lost in the last 16 months. BMY gets a win with a recent approval, but still faces turmoil and generic competition.
- Alon USA Energy rallied 19.48% on Monday after a bullish outlook from Goldman Sachs. The firm was quoted as saying, “Alon, whose refining ops center around a Texas facility, benefits from spreads between Brent-WTI, WTI-Midland, and WTI-Cushing oil prices, and thinks the recent IPO, which contains ALJ's interest in the refinery, will "help investors recognize the inherent value of the asset. The company has performed well in 2012, looks to be in a growth stage, and obviously a lot of investors are betting on the company to succeed.
Each of the calls on Monday could carry over to the new-year, and if these firms are correct, then price targets could be reached. I think each firm provided a fair assessment, but one that should be followed with your own due diligence. A note from an analyst is not enough to make an informed investment decision, an assessment of fundamentals and an outlook of the economy must be performed. However, each firm provides a good starting point for you to begin your research; and I believe each is worth exploring.
BrianNichols has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook and FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!