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BMO Capital Markets Offers Up A Host Of Contrarian Stock Ideas

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BMO Capital Markets Offers Up A Host Of Contrarian Stock Ideas

In a client note on Wednesday, analysts at BMO Capital Markets listed a number of different contrarian investment ideas. The analysts wrote that "these ideas mostly highlight the prospects for a particular individual investment, although they may also encompass differentiated thoughts on an associated industry, sector, or commodity backdrop." Below, Benzinga examines a handful of these ideas in more detail.

Hello, Contrarian Investors

Archer Daniels Midland Company (NYSE: ADM) and Bunge Ltd (NYSE: BG): BMO is looking for these two agricultural market leaders to show accelerating earnings growth beginning in the fourth quarter of 2016 and through 2017. The analysts noted that disappointing results at both companies in the second quarter have triggered concerns about future performance.

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Bloomin' Brands Inc (NASDAQ: BLMN): The BMO analysts acknowledge that recent deterioration in same-store sales at the restaurant operator is a cause for concern; they see strong earnings capacity over the next 18 months with BMO's current 2017 EPS estimate more than 10 percent above current consensus.

Harley-Davidson Inc (NYSE: HOG): BMO points out that Harley has received seven recent downgrades in light of disappointing guidance revisions and now is "among the most universally unloved stocks in the leisure industry." Following BMO's recent upgrade of the shares, just three of 20 analysts have positive ratings on the stock, but BMO is expecting the company's September release of new 2017 models to trigger pent-up demand.

Texas Instruments Incorporated (NASDAQ: TXN): The analysts wrote, "While two-thirds of the Street remains neutral to bearish on TXN, we expect out multi-year thesis of returning its increasing cash flow to shareholders through share repurchase and dividends to continue to play out over time." Currently, BMO has a price target of $92 on the stock, which is 30 percent above the Wall Street average.

Whole Foods Market, Inc. (NASDAQ: WFM): While much of Wall Street remains positive on Whole Foods, BMO sees downside in the stock. The analysts believe that the company will have to become even more aggressive with its pricing in order to drive sales. They also noted that changes in the company's pricing strategies have not materially improved consumer perceptions about the chain's price points versus competitors.

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