Halliburton and More: Goldman Says These Stocks Have Upside In 2013

$6.1 billion market cap mining equipment manufacturer Joy Global Inc. (NYSE:JOY) was another of the bank’s recommendations. Despite double-digit growth rates of revenue and earnings in its most recent quarter compared to the same period in the previous fiscal year, the stock is down 32% in the last year. This is likely due to investors worrying about macro conditions, particularly in China (the stock’s beta is 2.2). Billionaire Ken Griffin’s Citadel Investment Group more than doubled the size of its position between July and September, to a total of about 770,000 shares (find Ken Griffin’s favorite stocks). At 9 times earnings we think that Goldman found another value play here; investors may want to consider peer Caterpillar as another possibility.

Teradata Corporation (NYSE:TDC), which data solutions and consulting services, has an upside of 46% according to the team of Goldman analysts. Teradata is a growth stock: it trades at 26 times trailing earnings, so it needs significant improvement on the bottom line to justify its valuation let alone prove undervalued. Net income was up 20% last quarter versus a year earlier, which is a start, but we would need to see that growth rate continue for some time before we’d recommend buying. Maverick Capital, managed by Lee Ainslie, initiated a position in Teradata during the third quarter. See more stocks Ainslie was buying.

Another stock where Goldman sees upside is Owens-Illinois, Inc. (NYSE:OI), a $3.3 billion market cap manufacturer of glass containers. This is another stock with considerable exposure to the broader economy, with a beta of 2.2; we’d note that the bank’s picks we’ve discussed have been generally bullish on global growth. An insider was buying the stock in July (view a history of insider purchases at Owens-Illinois) and though the price is up about 5% since that time insider purchases tend to be bullish signs and Goldman obviously believes the stock still have quite a bit of potential. The stock trades at 7 times forward earnings estimates; its revenue and earnings have been down, so we wouldn’t necessarily recommend buying, but the multiple is low enough that we think it could be worth a closer look.