Credit Suisse expands 'Top of the Crop' list to five stocks
Three new stocks make the Credit Suisse best-of-the-best picks list, with the total now five for January.
Microsoft (NASDAQ:MSFT) and Discover (NYSE:DFS) remain on the list from December, while Ovintiv (NYSE:OVV), Axon Enterprise (NASDAQ:AXON) and Dover (NYSE:DOV) also make the grade. Motorola (MSI) and Knight-Swift (KNX) drop out.
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:
- "Highest conviction Outperform ideas where CS analysts' estimates and target prices are above consensus and consensus is not overly bullish."
- 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."
"DOV has multiple levers to drive EPS growth in 2023, through investing its FCF in M&A, share re-purchases and restructuring. DOV is spending 17c on restructuring in DCEF in ’22 which should add an incremental 23c to EPS in ’23, suggests an excellent ROI from restructuring," analyst Guy Hardwick wrote.
The other above consensus calls are: Chipotle (CMG), CMS Energy (CMS), Amazon (AMZN), MasTec (MTZ), Goldman Sachs (GS), Charter Communications (CHTR), Air Products and Chemicals (APD) and Cyxtera Technologies (CYXT).
The other HOLT ideas are: TransDigm (TDG), On Holding (ONON), Visa (V), HCA Healthcare (HCA), UnitedHealth (UNH), Apple (AAPL), Arista Networks (ANET) and Tradeweb (TW).