Credit Suisse 'Top of the Crop' list down to one name

Swift truck driving on the freeway

Sundry Photography/iStock Editorial via Getty Images

The Credit Suisse list of best stocks surfaces just one name for September: Knight-Swift Transportation (NYSE:KNX).

Credit Suisse Product Manager Andrew St. Pierre defines the "Top of the Crop" stocks as the "highest conviction combined with the least demanding market expectations."

The "Top of the Crop" criteria are:

  1. "Highest conviction Outperform ideas where CS analysts' estimates and target prices are above consensus and consensus is not overly bullish."
  2. Credit Suisse's HOLT is a model aiming for objectivity in converting income and balance sheet information into cash flow return on investment. "Outperform ideas with least demanding market expectations. Market-implied CFROI is below forecast CFROI and historical median."

Knight-Swift is the only stock that currently gets a top rating in both categories.

"We believe KNX’s discounted valuation more than compensates for macro-risk, and we are encouraged by the recent bottom that seems to have formed in its valuation," analyst Ari Rosa wrote. "The company’s recent efforts to diversify into the more attractive LTL industry should provide some buffer against a possible downturn. KNX has the highest FCF yield among its peers and the best operating margins in the industry but has received no premium relative to other truckload carriers."

The other above-consensus best names are: Chipotle (CMG), Monster Beverage (MNST), International Game Technology (IGT), Teck Resources (TECK.B:CA), Autodesk (ADSK) and T-Mobile (TMUS).

The HOLT ideas are: Axon Enterprise (AXON), Tradeweb Markets (TW), Arista Networks (ANET), Fortune Brands Home & Security (FBHS), On Holding (ONON), Discover Financial (DFS), Ovintiv (OVV), HCA Healthcare (HCA), Microsoft (MSFT), Motorola (MSI), UnitedHealth (UNH), Ventas (VTR), Emerson Electric (EMR) and Visa (V).

The top Underperform ideas are: Western Union (WU), American Express (AXP), Juniper (JNPR) and Robert Half (RHI).

See why SA's Quant Rating is also bullish on Knight-Swift.

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