Wall Street firms have made some changes to the list of stock recommendations for clients. The possibility of an increase in interest rates and a strong dollar has made investors switch to small cap stocks that do business in America.
Do analyst foresee a momentum shift in UBS?
In its latest report, UBS sticks with its pickings of the larger cap stocks. Focus list. Some changes have been made for 2Q2015. Added to the list is the drug wholesaler McKesson Corporation (NYSE:MCK) while removed from the list is Centene Corp and Macy’s, Inc. (NYSE:M).
The UBS report has a lot of tech stocks. The three companies that have stood out for yielding more than the 30 year U.S. Treasury bond are Cisco Systems, Inc. (NASDAQ:CSCO), Microsoft Corporation (NASDAQ:MSFT) and QUALCOMM, Inc. (NASDAQ:QCOM).
Cisco Systems, Inc. (NASDAQ:CSCO) is expected to gain a large share of the Verizon 100 G build out. While the revenue gained is not much given the size of the company, it is a big, new business type victory.
The stock of Cisco remain the top mega cap idea on the theme of improving IT spending, IT and telco network integration projects and a positive global macro environment according to analysts.
Cisco also posted high earnings last time and raised the dividend payout to shareholders according to analysts. Cisco is also one of the attractive stock based on valuation alone, added analysts.UBS price target for the stock is $32, and the consensus price is $30.21. The share is currently trading at $27.25
Microsoft Corporation (NASDAQ:MSFT) did not have a very good start this year it disappointed on earnings. Last year, the company had an outstanding run, a selloff in the stock gives investors a good entry point.
The company announced a new Spartan web browser to replace Internet Explorer in Windows 10. While the name may change, the news is welcome.
Microsoft’s price target is $49, and the consensus estimate is $47.06. Shares closed Wednesday at $40.29.
Qualcomm got hammered for lowering its full-year earnings and revenue forecast along with the sales of its semiconductor business.
The stock though is a Wall Street favorite, and many are holding the stock believing it to have tremendous long-term value.