Morgan Stanley just released its annual “Vintage Values” list for 2016. The list is comprised of 15 stock picks to own for the next 12 months.
Choosing The List
In choosing the stocks to include in this year’s list, Morgan Stanley started with 60 top picks from the firm’s analysts. These top picks were then scrutinized by the firm’s Stock Selection Committee, and 15 stocks were chosen from the bunch.
“We selected stocks with over $1 billion in market cap that look likely to realize superior risk-adjusted returns between now and July 2016,” the firm explains in the report.
Considerations
The committee focused on three primary criteria for selecting the stocks on this year’s list.
First, the committee looked at the most up-to-date data and statistics on each stock and didn’t simply rely on consensus forecasts. Second, the committee took into consideration the full risk profile of each pick, choosing only stocks with favorable risk/reward balances in the coming year. Finally, Morgan Stanley identified stocks that have clear positive catalysts coming in the next year that pave a path to higher share prices.
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Last Year's Picks
The stocks on last year’s Vintage Values list produced a 9.4 percent one-year return. Ten of the 15 stocks produced positive returns during that span, and the list outperformed the S&P 500 by 0.35 percent.
The 2016 List
This year, Morgan Stanley chose the following 15 stocks for its Vintage Values list:
- Ameriprise Financial, Inc. AMP
- Apple Inc. AAPL
- Bank of America Corp BAC
- Comcast Corporation CMCSA
- Crown Castle International Corp CCI
- Estee Lauder Companies Inc EL
- Hilton Worldwide Holdings Inc HLT
- Ingersoll-Rand Plc IR
- LinkedIn Corp LNKD
- Magna International Inc MGA
- Marathon Oil Corporation MRO
- McKesson Corporation MCK
- Oaktree Capital Group OAK
- Thermo Fisher Scientific Inc TMO
- Visa Inc V
Disclosure: the author owns shares of Bank of America.
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