Morgan Stanley Issues 2015 'Vintage Values' Stock List
Morgan Stanley on Wednesday released its "Vintage Values" list for 2015. The list is made up of 15 stocks that the firm suggests holding over the next 12 months.
To be on the list, the stock must have over $1 billion in market cap and be likely to post "superior risk-adjusted returns" from now until July 2015.
There are three criteria on which the stocks are judged:
- Differentiated research
- Favorable risk-reward profiles
- Clear Catalysts
Comments from the note on three of the more high profile stocks can be found below, followed by a complete listing of the stocks included in the firm's Vintage Values list.
Apple (NASDAQ: AAPL)
"Apple shares do not price in upcoming hardware, software, and sercies innovation, in our view."
The note pointed specifically at larger-screen iPhones and the iWatch as drivers of accelerated growth and margin expansion.
MasterCard (NYSE: MA)
"Fundamental growth potential remains strong and we believe the company can continue to generate 20 percent+ EPS growth over the next several years."
The firm sees the regulatory risk in Europe as "manageable", but cautioned it may take a while for the issue to play out. Additionally, the firm noted MasterCard's ability to generate cash allows for continued share buybacks.
Nike (NYSE: NKE)
"Bears say valuation is too high and Nike is too big to grow sales at the Street's forecasted high-single-digit rate. Our view is NKE can deliver a 10% annual 3-year total shareholder return even if its P/E falls to its LT avg."
As key values drivers, the firm pointed to futures growth (metric for orders not-yet-delivered), total sales growth and operating margin.
2015 Vintage Values
- Abbot Laboratories (NYSE: ABT)
- Amgen (NASDAQ: AMGN)
- American Express (NYSE: AXP)
- Apple (NASDAQ: AAPL)
- Canadian Pacific Railway (NYSE: CP)
- Eaton Corporation plc (NYSE: ETN)
- Estee Laudes Companies (NYSE: EL)
- Hess (NYSE: HES)
- L Brands (NYSE: LB)
- Magna International (NYSE: MGA)
- MasterCard (NYSE: MA)
- Monsanto (NYSE: MON)
- Nike (NYSE: NKE)
- Prudential Financial (NYSE: PRU)
- XL Group plc (NYSE: XL)
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