- Jefferies is updating its analysts’ list of top stock picks for 2021.
- The firm says its highest-conviction stocks have handily outperformed the S&P 500 this year.
- Jeffries’ analysts forecast 12-month double-digit gains for nearly every single stock on the list.
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By most measures stocks have had a good year in 2021, even though the pace of the market’s gains has slowed compared to their frantic pace in late 2020.
But there is always room for improvement, and Jefferies says its analysts are offering one path forward with their Franchise Picks list of best ideas.
“As of 5/31/21, the Franchise Picks list has outperformed the SPX by ~400 bps on a total return basis,” the firm wrote in a note to clients. The S&P 500 posted a total return of 9.5% over the first five months of the year, so that implies a total return of about 13.5% for the Jefferies stocks.
The list is spread out across the market, and includes companies whose prospects are linked to the economic recovery as well as those that Jefferies simply considers undervalued. There are three additions to the list in June: industrial firm Parker Hannifin, implantable contact lens maker Staar Surgical, and video game publisher Take-Two.
It removed blood and plasma services company Haemonetics, used car retailer CarMax, and consumer products maker Procter & Gamble from the list.
In total, Jefferies expects double-digit gains for 20 of the 24 stocks on the list. Those stocks are ranked from lowest to highest based on the gains implied by the analysts’ price targets, which shows the upside Jefferies analysts believe they have. Percentages were calculated based on Thursday’s closing prices.
Source: Business Insider