In the last few weeks, concern has grown that US stocks may have peaked.
Fundstrat Global’s Tom Lee isn’t so worried. In fact, he’s got a 2,325 year-end target for the S&P 500. That’s 11% higher from Friday’s levels.
“[W]e continue to see a “catch-up” trade for US equities through year-end,” Lee wrote in a note to clients.
“The natural question is what is expected to outperform into year-end? In addition to our cyclical tilt, we believe ‘contrarian-style’ stocks will show leadership into year-end.”
Lee defines contrarian stocks loosely as those that have underperformed the market (i.e. lag the Russell 1000 over the past three years), but have improving fundamentals. He handpicked 10 stocks from a pool of 125 that he thinks could be the market through the end of the year.
LT expected EPS growth: 75%
Management Outlook: 'We are re-confirming that 2015 will be a breakthrough year for Ford as we continue accelerating our One Ford plan, delivering product excellence and driving innovation in every part of the business in a way that benefits all of our stakeholders.' (President and CEO Mark Fields)
LT expected EPS growth: 18%
Management Outlook: 'Outerwall's strong performance this quarter was the result of continued execution of our strategy of optimising our core Redbox and Coinstar businesses, scaling ecoATM and improving operational efficiencies across the company. We are leveraging our market-leading brands to drive profitability and deliver value for shareholders, partners and customers.' (Interim CEO Nora M. Denzel)
LT expected EPS growth: 33%
Management Outlook: 'It is always a plus to start the year off well and the first quarter, as much as any, presents its share of challenges. I like where we are and our start. I'm looking for confirmation of retention trends behaving as we expect, Agency auto improvements, and continued execution on our Destination Strategy. Combined with strong operational measures, we have every reason to feel the rest of the year could be a strong build from here.' (President and CEO Glenn Renwick)
LT expected EPS growth: 42%
Management Outlook: 'We are excited about the opportunities ahead of us this year and are focused on continuing to deliver innovation, value and leading omni-channel solutions to our customers.' (Chairman and CEO Bill Nuti)
LT expected EPS growth: 32%
Management Outlook: 'While work remains to be done for Triumph to realise its full potential, we are intensely focused on leveraging the strength of our portfolio and controlling our costs to drive sustainable growth and value creation.' (President and CEO Richard C. Ill)
LT expected EPS growth: -7%
Management Outlook: 'Looking ahead, we are optimistic as we head into the summer months and what is typically the peak demand period for chicken. Total grain costs remain below last year's prices, and demand for chicken products remains strong.' (Chairman and CEO
Joe F. Sanderson, Jr.)
LT expected EPS growth: 71%
Management Outlook: 'We remain committed to maximizing long-term shareholder value, as evidenced by the $US30 million in share repurchases conducted and $US24 million in dividends paid in the first quarter. Since our IPO four years ago, we have returned more than $US1.2 billion of capital to our shareholders in the form of share repurchases and dividends.' (Chairman and CEO Mark Casady)
LT expected EPS growth: 31%
Management Outlook: 'We developed a franchise that is exceptionally resilient to challenging times, and, in 2014, we made bold decisions to position the company for standout performance in better markets. Supply and demand rules -- and over the coming years, demand on agriculture, and for our products, will flourish. Mosaic is ideally situated to flourish along with it.' (President and CEO James T. Prokopanko)