6 Stocks Where Analysts Are Expecting Big Gains

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 |  Includes: BAC, BTUUQ, HAL, LUV, MS
by: Hawkinvest

According to a data compiled by Bloomberg, the stocks below have upside potential of about 50% from current levels. This is based on the current price of each stock and the average price target set by analysts. Bloomberg states "The average estimate is based on data compiled by Bloomberg and reflects forecasts for the next 12 months, a period that varies among brokerage firms. Only companies that have at least four analyst target prices are included." Read more and see the entire list here. Here is a closer look at the stocks with the most potential for gains based on the Bloomberg data:

Halliburton Company (NYSE:HAL) provides maintenance and other services to the oil and gas industry. This stock was trading around $55 before the markets started to correct in August, then it dropped to about $30, but has started to rebound. The stock looks like a solid buy on any dips. The average price target is about $81 which gives this stock about 43% upside.

Here are some key points for HAL:

  • Current share price: $37.29
  • The 52 week range is $27.21 to $57.77
  • Earnings estimates for 2011: $3.35 per share
  • Earnings estimates for 2012: $4.08 per share
  • Annual dividend: 36 cents per share which yields .9%

Peabody Energy Corporation (BTU) primarily engages in the exploration, mining, and the sale of coal in the USA and Australia.

This stock was trading around $60 per share in July and the share price has almost been cut in half in the market correction. It was trading for about $33 per share in the past couple of weeks, so I would wait for dips before buying. The average price target is about $61 which gives this stock about 45% upside.

Here are some key points for BTU:

  • Current share price: $40.40
  • The 52 week range is $30.60 to $73.95
  • Earnings estimates for 2011: $3.95 per share
  • Earnings estimates for 2012: $5.69 per share
  • Annual dividend: 34 cents per share which yields .8%

Morgan Stanley (NYSE:MS) is a leading investment bank. This stock is trading at about 6 times 2012 earnings and well below book value, which is $30.17. A recent CNBC article details one analyst's view that the stock is oversold and poised for big gains in the long term. The article states "Sandler O'Neill principal Jeffrey Harte told CNBC Monday he is maintaining his "buy" rating on Morgan Stanley shares, despite their drop on the bank's possible exposure to French banks that have ties to Greece." It goes on to say "I think it's time to buy that stock," Read the full article here. The average price target is about $23 which gives this stock about 45% upside.

Here are some key points for MS:

  • Current share price: $15.89
  • The 52 week range is $11.58 to $31.04
  • Earnings estimates for 2011: 99 cents per share
  • Earnings estimates for 2012: $2.42 per share
  • Annual dividend: 20 cents per share which yields 1.2%

Bank of America (NYSE:BAC) has been in decline due to concerns about new regulations, lawsuits, liabilities from the mortgage lender Countrywide, and more. However, BofA has been making tough choices and has taken steps for a turnaround including raising capital, and settling lawsuits. A number of investors believe BofA shares could double in the next year or so. Some very successful investors like Warren Buffet and Bruce Berkowitz of Fairholme Funds have invested and believe that the stock has plenty of upside. The average price target is about $9.75 which gives this stock about 50% upside.

Here are some key points for BAC:

  • Current share price: $6.11
  • The 52 week range is $5.13 to $15.31
  • Earnings estimates for 2011: loss of 5 cents per share
  • Earnings estimates for 2012: profit of $1.01 per share
  • Annual dividend: 4 cents per share which yields .6%

Baker Hughes (NYSE:BHI) provides drilling products and services to the oil and natural gas industry. This stock has actually surged from about $70 in late June to around $78, then it dropped with the markets to about $45, but has started to rebound. The stock looks like a solid buy based on earnings growth. The average price target is about $81 which gives this stock about 43% upside.

Here are some key points for BHI:

  • Current share price: $56.84
  • The 52 week range is $41.91 to $81
  • Earnings estimates for 2011: $4.35 per share
  • Earnings estimates for 2012: $5.61 per share
  • Annual dividend: 60 cents per share which yields 1%

Southwest Airlines (NYSE:LUV) is a leading passenger airline with a fleet of about 548 aircraft in the USA. This stock recently hit a 52 week low and is trading below book value, which is $8.33. Management seems to think the stock is undervalued and recently announced it would buy back $500 million worth of shares. The average price target is about $12.50 which gives this stock about 50% upside.

Here are some key points for LUV:

  • Current share price: $8.12
  • The 52 week range is $7.15 to $13.99
  • Earnings estimates for 2011: 39 cents per share
  • Earnings estimates for 2012: 76 cents per share
  • Annual dividend: 2 cents per share which yields .2%

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Disclosure: I am long BAC.