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- RBC Capital Markets provided a third-quarter update to its annual list of “Top 30 Global Ideas for 2018.” We compiled the 14 US-based companies from the list.
- The portfolio consists of global 30 stocks poised to grow in the year ahead.
- The list is created on an annual basis by RBC Capital Markets’ Global Equity Research Department with quarterly updates.
RBC Capital Markets provided a third-quarter update to its annual list of “Top 30 Global Ideas for 2018.” The portfolio consists of 30 stocks poised to grow in the year ahead.
The list is created on an annual basis by RBC Capital Markets’ Global Equity Research Department with quarterly updates. “We publish quarterly updates of the Top 30 to highlight performance metrics YTD as well as any potential updates to our investment thesis or price targets,” RBC Capital Markets added.
We rounded up the US-based companies that RBC says are primed to grow.
Air Lease Corporation
Ticker: AL
Market Cap: $5.15 billion
Rating: Top Pick
Price Target: $93
Dividend yield: 0.9%
YTD Total Return: -4%
“We anticipate continued portfolio expansion on aircraft deliveries to support continued strong revenue expansion and robust 20% + EPS growth ahead.”
Source: RBC Capital Markets
Aptiv
Ticker: APTV
Market Cap: $22.2 billion
Rating: Outperform
Price Target: $120
Dividend yield: 1%
YTD Total Return: -0.4%
“Aptiv’s strong top-line growth should allow for further margin expansion.”
Source: RBC Capital Markets
Celgene Corporation
Ticker: CELG
Market Cap: $ 65.5 billion
Rating: Outperform
Price Target: $110
Dividend yield: 0
YTD Total Return: -14.3%
RBC Capital Markets sees multiple areas of growth for Celgene’s best-selling cancer drug Revlimid, including share gains, demographic expansion, and pricing power.
Source: RBC Capital Markets
Dollar Tree
Ticker: DLTR
Market Cap: $19.4 billion
Rating: Outperform
Price Target: $96
Dividend yield: 0
YTD Total Return: -24.01%
“In our view, few companies have the combination of store growth, customer acquisition growth, and category expansion that Dollar Tree offers.”
Source: RBC Capital Markets
DowDuPont
Ticker: DWDP
Market Cap: $150.1 billion
Rating: Top Pick
Price Target: $81
Dividend yield: 2.9%
YTD Total Return: -8.2%
“We believe the majority of the markets can continue the momentum through 2018 with growth out of North America and Asia, steadiness in Europe, and potential stabilization in Latin America (Brazil).”
Source: RBC Capital Markets
Facebook
Ticker: FB
Market Cap: $481.8 billion
Rating: Outperform
Price Target: $225
Dividend yield: 0
YTD Total Return: -6.8%
“We believe the large amount of data collected on these users is a unique and valuable asset for ad and content targeting.”
Source: RBC Capital Markets
GDS Holdings
Ticker: GDS
Market Cap: $29.9 billion
Rating: Outperform
Price Target: $52
Dividend yield: 0
YTD Total Return: 55.9%
“Unlike most other data center providers in China, GDS is focused on being a carrier neutral data center operator with national reach, targeting high-performance self-developed datacenters located in key metros.”
Source: RBC Capital Markets
Magna International
Ticker: MGA
Market Cap: $17.9 billion
Rating: Outperform
Price Target: $74
Dividend yield: 2.5%
YTD Total Return: – 5.7%
“Global production is projected to grow at a ~1.3% CAGR through 2022E, and due to new business wins, MGA’s revenue should grow faster than this (at ~5%).”
Source: RBC Capital Markets
Netflix
Ticker: NFLX
Market Cap: $168.9 billion
Rating: Outperform
Price Target: $440
Dividend yield: 0
YTD Total Return: 94.7%
“This conclusion is based on our assessment of Netflix’s 57 million US subscriber and 73 million International subscriber bases, which make Netflix one of the largest global entertainment subscription businesses.”
Source: RBC Capital Markets
Parsley Energy
Ticker: PE
Market Cap: $9.2 billion
Rating: Outperform
Price Target: $42
Dividend yield: 0
YTD Total Return: -0.7%
RBC Capital Markets believe that Parsely Energy’s production growth profile, balance sheet, and oil hedge book are “best in class and differentiate from peers.”
Source: RBC Capital Markets
Service Now
Ticker: NOW
Market Cap: $36.3 billion
Rating: Top Pick
Price Target: $205
Dividend yield: 0
YTD Total Return: 50%
ServiceNow is an enterprise IT cloud company that delivers SaaS-based applications to automate and standardize IT business processes. RBC Capital Markets is bullish on the company’s ability to take share in the IT Service Management (ITSM) from legacy IT vendors.
Source: RBC Capital Markets
The Walt Disney Company
Ticker: DIS
Market Cap: $170 billion
Rating: Top Pick
Price Target: $140
Dividend yield: 1.3%
YTD Total Return: 9.6%
“The rub is that global DTC will likely be a drag on earnings as the streaming product rolls out, but we expect investors to look through this since Disney is one of the few media companies with the scale and content library to compete as a global player.”
Source: RBC Capital Markets
Waste Connections
Ticker: WCN
Market Cap: $21.09 billion
Rating: Outperform
Price Target: $84
Dividend yield: 0.7%
YTD Total Return: 13.1%
Waster Connections’ growth in earnings before interest, tax, depreciation and amortization and strong cash flow provides the basis for more meaningful acquisitions, according to RBC.
Source: RBC Capital Markets
Xylem
Ticker: XYL
Market Cap: $14.5 billion
Rating: Outperform
Price Target: $85
Dividend yield: 0.9%
YTD Total Return: 18.1%
“Positives include the scarcity value in Xylem’s sector-leading 90% water exposure, leverage to healthy public water utility markets (50% of revenues), ~350 bps of long-term margin upside, and M&A optionality.”
Source: RBC Capital Markets
