Philip van Doorn

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March 28, 2020, 4:05 p.m. EDT

You can be ‘practically stealing’ quality stocks now, according to Jefferies

The bank’s analysts identified companies with strong fundamentals that are attractive because of ‘indiscriminate selling’

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By Philip van Doorn, MarketWatch


Bloomberg
A driver wears a protective mask while traveling in an Amazon.com delivery truck in New Rochelle, N.Y.

Investors are trying to get ahead of an eventual turnaround for the stock market, even as the coronavirus spreads further across the U.S.

Analysts at Jefferies have published a list of 47 stocks that they believe have “strong fundamentals” and attractive valuations, with opportunities created by “indiscriminate selling” over the past month. The largest of the recommended companies are listed below.

Warnings

Before getting to the list of “best stock ideas” from Jefferies, a number of warnings are in order:

• It’s too early to call a stock market bottom — it’s a fool’s errand.

• There have been comparisons to the 2008 financial crisis. However, the speed of the current economic disruption is breathtaking. The stock market hasn’t been able to digest the effect of the self-quarantining and business shutdowns. J.P. Morgan has estimated that U.S. gross domestic product will shrink at an annual rate of 14% during the second quarter. But we won’t see second-quarter economic reports and corporate earnings reports until July.

• For the week ended March 21, Goldman Sachs expects to see claims rise to a seasonally adjusted 2.25 million when the figures are released Thursday.

• Getting back to comparisons to the 2008 crisis, the S&P 500 Index /zigman2/quotes/210599714/realtime SPX -0.68%  was down 32.4% from its intraday high Feb. 19 through the intraday low March 20 (excluding dividends), according to FactSet. That compares to a peak-to-trough decline of 57.3% from the intraday high on Oct. 11, 2007, until the intraday low March 9, 2009. With new COVID-19 infections still increasing rapidly, we may be nowhere near the bottom.

The Jefferies list

The analysts at Jefferies listed 47 buy-rated stocks across all sectors as “best ideas” in a report March 16 titled, in part, “Practically Stealing.” It was included in the firm’s “Picturing the Week’s Opportunities” report March 21.

The analysts selected “high-quality names that investors would want to own across a cycle — great companies that have strong business models, healthy cash flow and very robust balance sheets,” according to the report.

Here are the 15 largest companies by market capitalization of those 47:

Company Ticker Total return - Feb. 19 through March 20 Total return - 2020 Total return - 2019 Dividend yield Market cap. ($ billions)
Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -15% 0% 23% 0.00% $919
Visa Inc. Class A /zigman2/quotes/203660239/composite V -31% -22% 43% 0.82% $250
Home Depot Inc. /zigman2/quotes/208081807/composite HD -37% -30% 31% 3.94% $166
Cisco Systems Inc. /zigman2/quotes/209509471/composite CSCO -23% -25% 14% 4.04% $151
Adobe Inc. /zigman2/quotes/200389143/composite ADBE -23% -10% 46% 0.00% $143
Nvidia Corp. /zigman2/quotes/200467500/composite NVDA -35% -13% 77% 0.31% $126
Abbott Laboratories /zigman2/quotes/203724446/composite ABT -24% -21% 22% 2.12% $120
Chevron Corp. /zigman2/quotes/205871374/composite CVX -46% -50% 15% 8.69% $112
McDonald's Corp. /zigman2/quotes/203508018/composite MCD -31% -24% 14% 3.37% $111
Gilead Sciences Inc. /zigman2/quotes/210293917/composite GILD 10% 14% 8% 3.71% $93
Linde PLC /zigman2/quotes/207314668/composite LIN -32% -29% 39% 2.55% $81
Mondelez International Inc. Class A /zigman2/quotes/201769764/composite MDLZ -27% -21% 40% 2.63% $62
British American Tobacco PLC /zigman2/quotes/209116881/delayed UK:BATS -24% -21% 38% 8.28% $58
ServiceNow Inc. /zigman2/quotes/202729495/composite NOW -29% -10% 59% 0.00% $48
  Source: FactSet

You can click on the tickers for more about each company.

You have to scroll the chart to the right to see all the data, which includes dividend yields.

/zigman2/quotes/210599714/realtime
US : S&P US
4,134.94
-28.32 -0.68%
Volume: 2.26B
April 20, 2021 4:05p
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,334.69
-37.32 -1.11%
Volume: 2.53M
April 20, 2021 4:00p
P/E Ratio
79.94
Dividend Yield
N/A
Market Cap
$1701.59 billion
Rev. per Employee
$297,430
loading...
/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 223.32
-2.47 -1.09%
Volume: 4.36M
April 20, 2021 4:00p
P/E Ratio
47.66
Dividend Yield
0.57%
Market Cap
$483.62 billion
Rev. per Employee
$1.07M
loading...
/zigman2/quotes/208081807/composite
US : U.S.: NYSE
$ 323.93
-2.92 -0.89%
Volume: 3.58M
April 20, 2021 4:00p
P/E Ratio
27.15
Dividend Yield
2.04%
Market Cap
$347.02 billion
Rev. per Employee
$261,708
loading...
/zigman2/quotes/209509471/composite
US : U.S.: Nasdaq
$ 51.79
-1.06 -2.01%
Volume: 20.97M
April 20, 2021 4:00p
P/E Ratio
21.70
Dividend Yield
2.86%
Market Cap
$218.01 billion
Rev. per Employee
$636,155
loading...
/zigman2/quotes/200389143/composite
US : U.S.: Nasdaq
$ 514.21
-1.96 -0.38%
Volume: 1.67M
April 20, 2021 4:00p
P/E Ratio
44.71
Dividend Yield
N/A
Market Cap
$250.11 billion
Rev. per Employee
$571,371
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 606.85
-7.62 -1.24%
Volume: 8.06M
April 20, 2021 4:00p
P/E Ratio
87.93
Dividend Yield
0.11%
Market Cap
$401.74 billion
Rev. per Employee
$878,788
loading...
/zigman2/quotes/203724446/composite
US : U.S.: NYSE
$ 119.97
-4.56 -3.66%
Volume: 8.68M
April 20, 2021 4:00p
P/E Ratio
47.74
Dividend Yield
1.50%
Market Cap
$219.56 billion
Rev. per Employee
$317,505
loading...
/zigman2/quotes/205871374/composite
US : U.S.: NYSE
$ 101.34
-1.92 -1.86%
Volume: 8.07M
April 20, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
5.09%
Market Cap
$199.40 billion
Rev. per Employee
$1.98M
loading...
/zigman2/quotes/203508018/composite
US : U.S.: NYSE
$ 233.01
+1.20 +0.52%
Volume: 1.37M
April 20, 2021 4:00p
P/E Ratio
36.89
Dividend Yield
2.22%
Market Cap
$172.44 billion
Rev. per Employee
$96,039
loading...
/zigman2/quotes/210293917/composite
US : U.S.: Nasdaq
$ 66.38
+0.43 +0.65%
Volume: 4.93M
April 20, 2021 4:00p
P/E Ratio
849.68
Dividend Yield
4.28%
Market Cap
$82.65 billion
Rev. per Employee
$1.81M
loading...
/zigman2/quotes/207314668/composite
US : U.S.: NYSE
$ 285.78
-2.67 -0.93%
Volume: 1.03M
April 20, 2021 4:00p
P/E Ratio
60.76
Dividend Yield
1.48%
Market Cap
$150.56 billion
Rev. per Employee
$367,122
loading...
/zigman2/quotes/201769764/composite
US : U.S.: Nasdaq
$ 59.21
+0.52 +0.89%
Volume: 6.89M
April 20, 2021 4:00p
P/E Ratio
23.88
Dividend Yield
2.13%
Market Cap
$82.49 billion
Rev. per Employee
$336,468
loading...
/zigman2/quotes/209116881/delayed
UK : U.K.: London
2,692.50 p
-221.50 -7.60%
Volume: 8.46M
April 20, 2021 4:35p
P/E Ratio
9.66
Dividend Yield
8.01%
Market Cap
£64.52 billion
Rev. per Employee
£460,156
loading...
/zigman2/quotes/202729495/composite
US : U.S.: NYSE
$ 540.78
-8.59 -1.56%
Volume: 678,537
April 20, 2021 4:00p
P/E Ratio
917.74
Dividend Yield
N/A
Market Cap
$109.69 billion
Rev. per Employee
$345,104
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