Market Overview

Halliburton and Other Stocks Added to Jefferies Global Conviction List

The analysts at Jefferies (NYSE: JEF) have updated their Global Conviction List.

Halliburton (NYSE: HAL), Ingersoll-Rand (NYSE: IR), JDS Uniphase (NASDAQ: JDSU) and TRW Automotive Holdings (NYSE: TRW) have been added to the list.

The analysts' focus for its most recent review of the list was on innovation, technology and the ability of companies to expand market share. Below is a quick look at how the four stocks they have chosen have fared and what analysts in general expect from them.

Also note that, back in March, Jefferies added Deckers Outdoor (NASDAQ: DECK), PetroChina (NYSE: PTR) and Vantiv (NYSE: VNTV) to its Global Conviction List.


This oil field services giant ended its testimony last week at the trial over the April 2010 Gulf of Mexico oil spill disaster. The Houston-based Halliburton sports a market capitalization of more than $35 billion and offers a quarterly dividend yield of about 1.3 percent.

The price-to-earnings (P/E) ratio is lower than the industry average, and the long-term earnings per share (EPS) growth forecast is more than 16 percent. Halliburton's operating margin is better than the industry average, and the return on equity is almost 18 percent.

Of the 34 analysts surveyed by Thomson/First Call who follow this stock, 27 recommend buying shares. The mean price target, or where analysts expect the share price to go, indicates almost 22 percent potential upside. But the Jefferies price target of $47 is less than 19 percent higher.

While the share price of Halliburton is more than eight percent lower than a month ago, it is still up almost 15 percent in the past six months. The stock has outperformed competitors Baker Hughes (NYSE: BHI) and Schlumberger (NYSE: SLB) in that time.


This Dublin-based industrial and commercial products maker declared a quarterly dividend on common shares last week, as it has done in every quarter since 1919. Ingersoll-Rand has a dividend yield near 1.6 percent, and its market cap is more than $16 billion.

The long-term EPS growth forecast is about 11 percent, and the P/E ratio is less than the industry average. The operating margin is better than the industry average, and the short interest is less than one percent of the total float.

Just eight of the 20 analysts surveyed recommend buying shares, though only one rates the stock at Underperform. But the mean price target represents less than four percent potential upside relative to the current share price. The Jefferies price target, though, is about 15 percent higher and would be a multiyear high.

Shares are trading about nine higher than they were at the beginning of the year, despite pulling back in the past two weeks. Over the past six months, this stock's performance has been in line with competitor Johnson Controls (NYSE: JCI) but it has outperformed the broader markets.

JDS Uniphase

Like many of its competitors, JDSU shares slumped last week following an earnings warning from F5 Networks (NASDAQ: FFIV). Also, JDSU acquired software maker Arieso back in March. JDS Uniphase has a market cap of about $3 billion.

The forward earnings multiple of this S&P 500 company is less than the industry average P/E ratio. The long-term EPS growth forecast is about nine percent. But the return on equity is in negative territory. And the number of shares sold short represents about three percent of the float.

For at least three months, the consensus recommendation of the analysts polled has been to buy shares. The analysts believe JDSU has a plenty of head room, as their price target is about 20 higher than the current share price. At $19, the Jeffries price target is even higher.

Shares have retreated more than 17 percent in the past month. But the stock has outperformed the likes of Avago Technologies (NASDAQ: AVGO) and Finisar (NASDAQ: FNSR) over the past six months.

TRW Automotive

This Livonia, Mich.-based auto parts purveyor is scheduled to post quarterly results later this month, but analysts expect to see year-over-year declines in both EPS and revenue. The company has a more than $6 billion market cap but does not offer a dividend.

The P/E ratio is much less than the industry average, and the long-term EPS growth forecast is about 11 percent. The return on equity is about 31 percent. The short interest is less than three percent of the company's float.

All but one of the 10 surveyed analysts recommend buying shares, three of them rating the stock at Strong Buy. Their mean price target represents more than 24 percent potential upside. The Jefferies price target of $72 is marginally higher than the consensus target and would be a multiyear high.

Shares have pulled back more than eight percent in the past month. Over the past six months, TRW has outperformed Autoliv (NYSE: ALV) and the broader markets.

Posted-In: autoliv avago technologies Baker Hughes Deckers Outdoor F5 NetworksLong Ideas Short Ideas Trading Ideas Best of Benzinga


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