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(ROBERT GALBRAITH/REUTERS)
(ROBERT GALBRAITH/REUTERS)

Number Cruncher

Apple to soar 50%? 25 top-rated stocks Add to ...

What are we looking for?

The U.S. stocks that analysts expect to generate the highest returns over the next year.

The screen

Last week, Craig McGee, senior consultant at Morningstar Canada, provided us with a fascinating look at the Canadian stocks for which analysts have the highest expectations. Today, he extends his search south of the border.

More Related to this Story

Using Morningstar’s CPMS market database, he compiled analysts’ price targets for S&P 500 stocks over the next 12 months. He then compared the analysts’ consensus forecasts with the stocks’ current prices to determine the percentage gains implied by the target prices. He added in expected dividend yields to get a forecast total return for each stock over the next 12 months.

He listed the top 25 expected total returns in the accompanying table. To ensure adequate diversification, he imposed a limit of no more than five stocks from any single sector.

More about Morningstar

Morningstar Inc. provides independent investment research in North America, Europe, Australia and Asia. Its investment research tool, Morningstar CPMS, provides quantitative North American equity research and portfolio analysis to institutional clients and financial advisers. CPMS data cover more than 95 per cent of the investable North American stock market.

What we found

Forget Apple Inc.’s recent swoon. Analysts still expect great things from the Cupertino, Calif.-based giant. They say it will soar nearly 50 per cent this year. And they’re nearly as enthusiastic about Newmont Mining Corp. and Monster Beverage Corp.

Investors, though, should be aware that a list like this is far from foolproof. Analysts’ high hopes are frequently dashed on the stony ground of reality. If the market was truly convinced that Apple was going to soar 50 per cent by year end, it would have bid Apple stock up to nearly that level already.

Still, a list like this can be useful in pointing out stocks with a lot of buzz around their prospects. Just make sure to do your own research before buying any of the names listed here.

 

U.S. stocks expected to generate the highest return over the next year

Company Symbol $ Price
(Jan. 25)
Consensus
12-mo. Target
Price $
Expected
Price
Change
Expected
Yield
Expected
Total
Return
Apple Inc. AAPL-Q 439.88 650 47.80% 2.40% 50.20%
Newmont Mining Corp. NEM-N 43.36 61 40.70% 3.20% 43.90%
Monster Beverage Corp. MNST-Q 46.71 65 39.20% 0.00% 39.20%
Allegheny Technologies ATI-N 30.29 41 35.40% 2.40% 37.70%
Pitney Bowes Inc. PBI-N 12.15 15 23.50% 12.40% 35.80%
Newfield Exploration Co. NFX-N 28.89 39 35.00% 0.00% 35.00%
Garmin Ltd. GRMN-Q 38.77 50 29.00% 4.60% 33.60%
Peabody Energy Corp. BTU-N 25.82 34 31.70% 1.30% 33.00%
Apollo Group Inc. APOL-Q 20.7 27.5 32.90% 0.00% 32.90%
GameStop Corp. GME-N 23.71 30 26.50% 4.20% 30.80%
Goodyear Tire & Rubber GT-Q 13.87 18 29.80% 0.00% 29.80%
WPX Energy, Inc. WPX-N 14.73 19 29.00% 0.00% 29.00%
Microsoft Corp. MSFT-Q 27.88 35 25.50% 3.30% 28.80%
CONSOL Energy Inc. CNX-N 32.08 40.5 26.30% 1.60% 27.80%
Coach Inc. COH-N 51.21 64 25.00% 2.30% 27.30%
Micron Technology Inc. MU-Q 7.87 10 27.10% 0.00% 27.10%
Jabil Circuit Inc. JBL-N 19.94 25 25.40% 1.60% 27.00%
Noble Corp. NE-N 38.23 48 25.60% 1.40% 26.90%
Alexion Pharmaceuticals ALXN-Q 94.68 120 26.70% 0.00% 26.70%
Iron Mountain Inc. IRM-N 34.29 42 22.50% 3.20% 25.60%
Windstream Corp. WIN-Q 9.65 11 14.00% 10.40% 24.30%
MetroPCS Communications PCS-N 9.71 12 23.60% 0.00% 23.60%
Capital One Financial COF-N 56.32 69 22.50% 0.40% 22.90%
International Game Tech IGT-N 15.12 18.2 20.40% 1.90% 22.20%
Freeport-McMoRan Copper FCX-N 34.87 41 17.60% 3.60% 21.20%

All currencies U.S. Source: Morningstar Canada

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