40 Stocks Wall Street Analysts Are Insanely Bullish About

A recent study by Da and Schaumburg published in the Journal of Financial Markets shows that Wall Street analysts can successfully determine mispriced stocks in a given industry. This doesn’t mean that their buy and sell recommendations will yield abnormal returns. It means when analysts think a stock is undervalued relative to its peers, that stock will outperform them. When analysts think a stock is overvalued, it will most likely underperform its peers.

GLENVIEW CAPITAL

Given that analysts’ price targets contain useful information, we compiled the list of stocks analysts expect to increase the most over the next 12 months. The data is sourced from Bloomberg and Yahoo! Finance. A portfolio that is long the stocks analysts are bullish about the most and short the stocks analysts are bearish about the most returns more than 25% annually. Da and Schaumburg’s analysis showed that investors beat the market by buying the following. Here are the 40 stocks analysts are insanely bullish about:

Company Ticker Target Price Last Price Potential Upside
MONSTER WORLDWIDE MWW 23.89 15.59 53.2%
DONNELLEY R R & SONS CO RRD 26.25 18.08 45.2%
J D S UNIPHASE CORP JDSU 27.39 19.40 41.2%
F 5 NETWORKS INC FFIV 131.27 94.14 39.4%
MEDCO HEALTH SOLUTIONS INC MHS 71.75 52.02 37.9%
CLIFFS NATURAL RESOURCES CLF 128.83 93.54 37.7%
BANK OF AMERICA CORP BAC 18.35 13.44 36.5%
INTERNATIONAL PAPER CO IP 36.4 26.93 35.2%
SOUTHWEST AIRLINES CO LUV 16.83 12.51 34.5%
CISCO SYSTEMS INC CSCO 23.46 17.49 34.1%
VISA INC V 95.65 71.65 33.5%
GANNETT INC GCI 20 15.27 31.0%
CITIGROUP INC C 5.73 4.38 31.0%
MICROSOFT CORP MSFT 33.51 25.66 30.6%
THERMO FISHER SCIENTIFIC INC TMO 70 53.69 30.4%
AKAMAI TECHNOLOGIES INC AKAM 48.42 37.19 30.2%
MACYS INC M 29.79 22.96 29.7%
EXPEDIA INC EXPE 28 21.60 29.6%
STAPLES INC SPLS 25.47 19.67 29.5%
NETAPP INC NTAP 61.84 47.91 29.1%
SALESFORCE COM INC CRM 162.61 125.99 29.1%
NEWMONT MINING CORP NEM 71.25 55.24 29.0%
FORD MOTOR CO DEL F 18.94 14.72 28.7%
WYNDHAM WORLDWIDE CORP WYN 39.67 30.87 28.5%
CARNIVAL CORP CCL 49.87 38.81 28.5%
STATE STREET CORP STT 56.1 43.66 28.5%
HEWLETT PACKARD CO HPQ 54.42 42.49 28.1%
APPLE INC AAPL 435.97 340.95 27.9%
NVIDIA CORP NVDA 23.79 18.62 27.8%
TARGET CORP TGT 64.17 50.24 27.7%
INTERPUBLIC GROUP COS INC IPG 15.09 11.85 27.4%
SANDISK CORP SNDK 57.08 44.83 27.3%
MOTOROLA MOBILITY MMI 32.9 25.88 27.1%
AMGEN INC AMGN 67.06 52.83 26.9%
XEROX CORP XRX 13 10.26 26.8%
GOOGLE INC GOOG 735.88 581.67 26.5%
HALLIBURTON COMPANY HAL 57.67 45.65 26.3%
CELGENE CORP CELG 68.1 54.04 26.0%
FEDEX CORP FDX 112.4 89.49 25.6%
A F L A C INC AFL 65.77 52.71 24.8%

Some of these stocks are also favored by hedge funds. Larry Robbins’ Glenview has Medco Health Solutions (MHS). John Burbank’s Passport Capital and Phil Falcone’s Harbinger Capital are among the hedge funds with Cliff Natural Resources (CLF) holdings.

Citigroup is the second most popular stock among hedge funds. Steven Mandel’s Lone Pine, Bruce Berkowitz’s Fairholme, Lee Ainslie’s Maverick Capital, George Soros, Bill Miller’s Legg Mason Capital Management, Bill Ackman’s Pershing Square, David Tepper’s Appaloosa, Daniel Loeb’s Third Point, Andreas Halvorsen’s Viking Global, Richard Perry’s Perry Capital, Joseph DiMenna’s Zweig-DiMenna, Leon Cooperman’s Omega Advisors, Brevan Howard, and John Paulson’s Paulson & Co are among the prominent investors who are bullish about Citigroup.

Microsoft was owned by 161 hedge funds at the end of last year. Barry Rosenstein’s Jana Partners, David Einhorn’s Greenlight Capital, Craig Effron’s Scoggin Capital, and Brevan Howard are some of other hedge funds bullish about Microsoft. Whitney Tilson was extremely bulish about Microsoft too. He predicted Microsoft will reach $35 by the end of 2011.

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