OUTLINE:
*Each target price is (1) computed using CGFS' proprietary valuation and simulation approach and (2) adjusted within 3 standard errors of the estimate. Assumption and computation details are inserted at the end of each write-up.
This Week's Picks:
- Our Weekly Stock Picks*
- The Bond Report, What's next, & Key Earnings
*Each target price is (1) computed using CGFS' proprietary valuation and simulation approach and (2) adjusted within 3 standard errors of the estimate. Assumption and computation details are inserted at the end of each write-up.
This Week's Picks:
PVH Corp. is the best positioned retailer in a consolidating industry. PVH has been able to get low single digit revenue growth in the United States compared to the rest of the industry seeing flat to negative comps. The international growth, specifically in Europe and Asia will continue to add value to the company. The aforementioned revenue growth along with efficient cost management will lead to an increase in share price in the short and long term
Five Below has proven to outpace competitors by nearly 10% in revenue growth, while outpacing industry-operating margins by around 3%. Management is currently expanding into the market place by opening 100 new stores this year. At a low valuation, Five Below’s formidable past figures and success during a busy holiday season bring about a positive outlook for shareholders.
Mercury Systems, Inc. is an industry leader in defense security electronics. The company is poised for significant growth in the near future based on their numerous orders from large defense contractors, further solidifying their concrete customer base. Additionally, Mercury Systems, Inc. has developed a cutting-edge business model that will further their customer base and revenues within the defense sector.
O’Reilly’s Q3 upsetting results and Amazon’s threat of gaining market shared as an auto part distributer have put some pressure on auto part service retailers. However, I am confident in the long-term outlook for the automotive aftermarket. A continued aging of U.S. light vehicle population and ORLY’s service segment will guarantee O’Reilly a successful organic grown and an increase profit margins consequently. In my opinion, ORLY is a “buy”, with a 1-year price target of $243.91.
Prestige Brands Holdings Inc. is a global distributer of industry leading OTC healthcare and household products. In a recovering healthcare industry, Prestige is currently undervalued trading near its 52-week low of $42.30, presenting a great buy opportunity for stock appreciation. Consistently driving bottom line performance and generating strong free cash flow, Prestige is well aligned with their long-term growth targets. Industry leading margins along with the effective use of financial leverage allows Prestige to grow organically and create value for shareholders. With a current bull market environment, Prestige is an attractive short-term/mid-term investment opportunity.
Two of the leading drivers related to healthcare costs include expensive technologies and lack of cost consideration from patients. Individuals with spinal problems want the best products available; having little concern over price when it comes to their health. Patents want the latest, most advanced technology, and this is what Globus Medical provides. Spine disorders range anywhere from mild pain and loss of feeling to extreme pain and paralysis. Globus has developed over 170 different products accustomed to whichever spinal trauma a patient might have. Headquartered in Audubon, Pennsylvania, the company markets and sells their products within North, Central, & South America, Europe, Asia, Africa, and parts of Australia. With the introduction of Globus’ robotic surgical devices and orthopedic trauma products, stock appreciation will be noticed. These products have yet to come to the market, still waiting on clearance from the U.S. Food and Drug Administration. International expansion is another target, acquiring Alphatec Holdings, Inc accompanied with international sales professionals and distribution channels.