Stellar Picks: Top Six Picks at Morgan Joseph TriArtisan LLC
(List compiled by Eben Esterhuizen, CFA)
David Kestenbaum, head of equity research with Morgan Joseph TriArtisan, released the firm’s annual list of “Six Stellar Stocks” on Monday. The list contains a mix of familiar and surprising names. Kestenbaum explains the stock picks in an interview with CNBC, which we highlight in detail below.
To credit the firm, the 2010 stock list included American Water Works (AWK) and Primoris Services (PRIM) which rallied 33% and 116% respectively from September 15th to present. Stage Stores (SSI) and CBL Associates Properties (CBL) went up by 21% and 0.7%. However, Harris Corp. (HRS) and Navistar (NAV) dropped 15% and 7% respectively in the same period.
Interested? Here’s the 2011 list along with Kestenbaum’s comments where applicable:
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1. Raytheon (RTN): Provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally.
2. Tyson Foods (TSN): Engages in the production, distribution, and marketing of chicken, beef, pork, and prepared food products, as well as related allied products worldwide. The number of chicks hatched and the number of eggs placed in the incubators is down and if you couple that strong international demand, we think that results are going to get better at tyson and things are also they're doing pretty well in the pork side of their business too.
3. St. Jude Medical (STJ): Develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide.
4. Ironwood Pharmaceuticals (IRWD): Develops, and commercializes medicines targeting therapeutic needs.
5. Equinix (EQIX): Provides data center services for the protection and connection of information assets to enterprises, content providers, financial companies, network service providers, and cloud and IT services companies. "The company depends on internet traffic, which even in a bad economy people are still surfing the net… Data traffic is growing no matter what the economy does and we think that this company… they're a web hosting company.. and as data traffic goes, the demand for their services keeps increasing. And they're hiring 65-70 new sales people this year. So I think you'll see incredible growth in this operation."
6. Advance Auto Parts (AAP): Operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. "People are trying to stretch out their cars instead of buying new ones. There are also more cars on the road. In 2006 there were 138 million cars on the road, today there are over 150 million. and people are holding their cars for over 10 years now versus about 9 1/2 at that time in 2006" Joseph believes this stock to be a long term play as trends will continue to have a positive effect on the stock. He also believes there is "well over 20% upside from here."