Report
EUR 86.16 For Business Accounts Only

37 Stocks for March 2018 (Full Report)

We highlight stocks that demonstrate solid growth at a reasonable price (GARP). Stocks selected for our model portfolio strategies all rank highly for the following metrics, with an emphasis on proxies for cash flow growth and ROIC: 

  • Relative Value
  • Operating Momentum
  • Analyst Revision Momentum
  • Fundamental Quality

Pages 7-3 contain brief commentary and highlights of a few stocks that seem particularly attractive.    

Page 14 contains rebalancing actions for our long-only model portfolio.

Page 16 contains rebalancing actions for our short-only model portfolio.

Target and stop prices, as well as updated return data, to be provided in our daily reports that will follow. 

Underlyings
Applied Materials Inc.

Applied Materials provides manufacturing equipment, services and software to the semiconductor, display and related industries. The company's segments are: Semiconductor Systems, which develops, manufactures and sells a range of manufacturing equipment used to fabricate semiconductor chips; Applied Global Services, which provides integrated solutions to support equipment and fab performance and productivity; and Display and Adjacent Markets, which is comprised of products for manufacturing liquid crystal displays, organic light-emitting diodes and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices.

Baker Hughes Company Class A

Baker Hughes is an energy technology company. The company's segments are: Oilfield Services, which provides products and services for onshore and offshore operations ranging from drilling, evaluation, completion, production, and intervention; Oilfield Equipment, which provides products and services for the subsea, offshore surface and onshore operating environments; Turbomachinery and Processing Solutions, which provides equipment and related services for mechanical-drive, compression and power-generation applications; and Digital Solutions, which includes condition monitoring, industrial controls, non-destructive technologies, measurement, sensing, and pipeline solutions.

CBRE GROUP INC

CBRE Group is a holding company. Through its subsidiaries, the company is a commercial real estate services and investment firm. The company's segments include: Advisory Services, which provides a range of services globally, including property leasing and capital markets; Global Workplace Solutions, which provides a suite of integrated, contractually-based outsourcing services globally for occupiers of real estate; and Real Estate Investments, which is comprised of investment management services provided globally, development services in the United States and United Kingdom and a service designed to help property occupiers and owners meet the demand for flexible office space solutions on a global basis.

Citizens Financial Group Inc.

Citizens Financial Group is a bank holding company. The company's principal business activity is banking, conducted through its banking subsidiary Citizens Bank, National Association. The company's operating segments are: Consumer Banking and Commercial Banking. In Consumer Banking, the company provides mobile and online banking, a 24/7 customer contact center and automated teller machines. Consumer Banking products and services include a range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, the company provides corporate, institutional and not-for-profit clients a range of wholesale banking products and services including lending and deposits, and capital markets.

CONOCOPHILLIPS

ConocoPhillips is an exploration and production company engaged in exploring for, producing, transporting and marketing crude oil, bitumen, natural gas, liquefied natural gas and natural gas liquids. The company's segments include: Alaska, which operates in Alaska; Lower 48, which operates in the United States and the Gulf of Mexico; Canada, which operates in Alberta and British Columbia; Europe and North Africa, which consists of operations and exploration activities in Norway, the United Kingdom and Libya; Asia Pacific and Middle East, which operates in China, Indonesia, Malaysia, Australia, Qatar, and Timor-Leste; and Other International, which operates in Colombia, Chile and Argentina.

Cummins Inc.

Cummins is a diesel engine manufacturer. The company's segments include: Engine, which manufactures and markets a range of diesel and natural gas powered engines; Distribution, which is the company's primary sales, service, and support channel; Components, which supplies aftertreatment systems, turbochargers, transmissions, filtration products, electronics and fuel systems for commercial diesel and natural gas applications; Power Systems, which includes power generation, industrial, and generator technologies product lines; and New Power, which designs, manufactures, sells and supports electrified power systems ranging from fully electric to hybrid, along with components and subsystems.

KKR & Co Inc

KKR & Co. is an investment firm, engaged in managing investments across various asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. The company's segments are: Private Markets, which manages and sponsors private equity funds and co-investment vehicles that invest for long-term appreciation, and manages and sponsors a group of funds and co-investment vehicles that invest in real assets; Public Markets, which operates its combined credit and hedge funds businesses; Capital Markets, which is comprised of its global capital markets business; and Principal Activities, which manages the firm's own assets and deploys capital to support its businesses.

Kohl's Corporation

Kohl's operates department stores, a website (www.Kohls.com), FILA outlets, and Off-Aisle clearance centers. The company's Kohl's stores and website sell proprietary and national brand apparel, footwear, accessories, beauty and home products. The company's website includes merchandise that is available in its stores, as well as merchandise that is available only online. The company's portfolio includes private brands such as Apt. 9, Croft & Barrow, Jumping Beans, SO and Sonoma Goods for Life and exclusive brands that are developed and marketed through agreements with brands such as Food Network, LC Lauren Conrad, Elle and Simply Vera Vera Wang.

Lam Research Corporation

Lam Research is a supplier of wafer fabrication equipment and services to the semiconductor industry. The company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company's customer base includes semiconductor memory, foundry, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. The company's services include customer service, spares, improvement, and refurbishment of its deposition, etch, and clean products. The company sells its products and services to companies in the United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan.

Loxo Oncology Inc

Loxo Oncology is a biopharmaceutical company engaged in the development of selective medicines for patients with genetically defined cancers. The company's main product candidate is Larotrectinib, an oral, selective inhibitor of the tropomyosin receptor kinase (TRK) family in development for the treatment of tumors with TRK fusions. The company's drug candidate, LOXO-195 is designed as a second-generation TRK inhibitor intended to address predicted acquired resistance mechanisms resulting from therapy with a first-generation TRK inhibitor such larotrectinib, or multikinase inhibitors with anti-TRK activity. The company's LOXO-292 targets a cancer oncogene known as Rearranged during Transfection.

Methanex Corporation

Methanex is a producer and supplier of methanol to the international markets of Asia Pacific, North America, Europe and South America. Co.'s operations consist of the production and sale of methanol, a commodity chemical.

Micron Technology Inc.

Micron Technology provides memory and storage solutions. The company's portfolio of memory and storage technologies include Dynamic Random Access Memory, Not And, 3D XPoint? memory, and Not Or. The company's segments are: Compute and Networking Business, which includes memory products sold into client, cloud server, enterprise, graphics, and networking markets; Mobile Business, which includes memory products sold into smartphone and other mobile-device markets; Storage Business, which includes Solid-State Drives and component-level solutions sold into enterprise and cloud, client, and consumer storage markets; and Embedded Business, which includes memory and storage products.

MKS Instruments Inc.

MKS Instruments is a provider of instruments, subsystems and process control solutions. The company has two segments: Vacuum & Analysis, which provides instruments, components, subsystems and software which are derived from its knowledge in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, radio frequency and data communication power, reactive gas generation and vacuum technology; and Light & Motion, which provides instruments, components and subsystems which are derived from its knowledge in lasers, photonics and optics.

Molina Healthcare Inc.

Molina Healthcare is a holding company. Through its subsidiaries, the company provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces. The company has two segments: Health Plans and Other. The company's health plans are operated by its respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization. The company's business includes: Medicaid, which provides health care and long-term care services and support to low-income Americans; and Medicare, which provides eligible persons age 65 and over and some disabled persons with a variety of hospital, medical insurance, and prescription drug benefits.

Morgan Stanley

Morgan Stanley is a financial holding company. Through its subsidiaries and affiliates, the company advises, and originates, trades, manages and distributes capital for, governments, institutions and individuals. The company's segments are: Institutional Securities, which provides investment banking, sales and trading, lending and other services; Wealth Management, which provides brokerage and investment advisory services, financial and wealth planning services, stock plan administration services, annuity and insurance products, residential real estate loans and other lending products, banking, and retirement plan services; and Investment Management, which provides investment strategies and products.

NortonLifeLock Inc.

Symantec is a provider of cyber security. The company provides cyber security products, services and solutions to organizations and individuals worldwide. The company's Enterprise Security portfolio includes a mix of products, services and solutions, delivered as part of an Integrated Cyber Defense platform. The company's platform unifies cloud and on-premises security to provide threat protection and information protection across endpoints, networks, email, and cloud applications. The company also provides services, support services, and cyber security services. The company's Cyber Safety solutions from Norton LifeLock help consumers protect their devices, online privacy, identities, and home networks.

Nucor Corporation

Nucor manufactures steel and steel products. The company's operations include international trading and sales companies that buy and sell steel and steel products. The company's segments are: steel mills, which produces sheet steel, plate steel, structural steel, and bar steel; steel products, which produces hollow structural section steel tubing, electrical conduit, steel joists and joist girders, steel deck, cold finished steel, steel fasteners, metal building systems, and wire and wire mesh; and raw materials, which produces direct reduced iron (DRI), brokers ferrous and nonferrous metals, pig iron, hot briquetted iron and DRI, supplies ferro-alloys, and processes ferrous and nonferrous scrap metal.

Peabody Energy Corporation

Peabody Energy is a coal company, engaged in the mining of thermal coal for sale primarily to electric utilities and metallurgical coal for sale to industrial customers. The company owns interests in several coal mining operations located in the U.S. and Australia. The company has a majority interest in several of those mining operations and an equity interest in Middlemount Coal Pty Ltd. (Middlemount), which owns the Middlemount Mine in Queensland, Australia. In addition to its mining operations, the company markets and brokers coal from other coal producers, both as principal and agent, and trade coal and freight-related contracts through trading and business offices in the U.S., Australia, China, and the U.K.

Portola Pharmaceuticals Inc.

Portola Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of therapeutics in the areas of thrombosis, other hematologic diseases and inflammation for patients who have limited or no approved treatment options. The company's primary product is Andexxa, an antidote for patients treated with rivaroxaban or apixaban, when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding. Bevyxxa is an anticoagulant approved for hospital and extended duration prophylaxis of venous thromboembolism in adult patients. Cerdulatinib is the company's investigational oral, dual spleen tyrosine kinase and janus kinase inhibitor.

Puma Biotechnology Inc.

Puma Biotechnology is a biopharmaceutical company with a focus on the development and commercialization of products to improve cancer care. The company in-licenses from Pfizer, Inc., the global development and commercialization rights to PB272 (neratinib, oral), PB272 (neratinib, intravenous) and PB357. Neratinib is an irreversible tyrosine kinase inhibitor that blocks signal transduction through the human epidermal growth factor receptors, HER1, HER2 and HER4. The company is primarily focused on the development and commercialization of the oral version of neratinib, and its drug candidates are directed at the treatment of HER2-positive breast cancer and HER2 mutated cancers.

SAGE Therapeutics Inc.

Sage Therapeutics is a clinical-stage biopharmaceutical company focused on developing and commercializing medicines to treat life-altering central nervous system disorders. The company's principal product candidate is ZULRESSO? (brexanolone) injection, a proprietary intravenous formulation of brexanolone for the treatment of postpartum depression (PPD). The company's other product candidate is SAGE-217, an oral compound that is being developed for PPD and major depressive disorder. The company also has a portfolio of other compounds that target GABAA receptors, which include SAGE-324 and SAGE-689. The company's second area of focus is the development of compounds that target the NMDA receptor, which include SAGE-718.

Steel Dynamics Inc.

Steel Dynamics is a steel producer and metal recycler. The company manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joists and deck products. The company's segments are: Steel, which produces steel from ferrous scrap and scrap substitutes, utilizing casting, automated rolling mills and several downstream steel coating and bar processing lines, and Iron Dynamics; metals recycling, which involves the purchase, processing, and resale of ferrous and nonferrous scrap metals into reusable forms and grades; and steel fabrication, which produces steel building components, including steel joists, girders, trusses, and steel deck.

Teradyne Inc.

Teradyne is a global supplier of automation equipment for test and industrial applications. The company designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. The company's automatic test equipment and industrial automation products and services include: semiconductor test systems; defense/aerospace test instrumentation and systems, storage test systems, and circuit-board test and inspection systems; industrial automation products; and wireless test systems.

Trinity Industries Inc.

Trinity Industries is a provider of railcar products and services in North America. The company has the following reportable segments: Railcar Leasing and Management Services Group, which provides operating leases for freight and tank railcars, as well as originates and manages railcar leases for third-party investors and provides fleet maintenance and management services to industrial shippers; Rail Products Group, which manufactures freight and tank railcars in North America used for transporting a variety of liquids, gases, and dry cargo, and also provides a range of maintenance services and solutions; and All Other, which includes the company's highway products business.

Under Armour Inc. Class A

Under Armour is engaged in the development, marketing and distribution of apparel, footwear and accessories for men, women and youth. The company provides HEATGEAR?, which is designed to be worn in warm to hot temperatures under equipment or as a single layer; and COLDGEAR?, which is designed to wick moisture from the body while circulating body heat from hot spots to help maintain core body temperature. The company's footwear products include running, basketball, cleated sports, slides, training, and outdoor. The company provides digital fitness subscriptions, along with digital advertising through its MapMyFitness, MyFitnessPal and Endomondo applications.

ViaSat Inc.

ViaSat is a provider of broadband technologies and services. The company conducts its business through three segments: satellite services, which provides satellite-based broadband services to consumers, enterprises, and mobile broadband customers; commercial networks, which develops and produces a variety of satellite and wireless products, systems and solutions that enable the provision of fixed and mobile broadband services; and government systems, which provides global mobile broadband services to military and government users, and develops and produces network-centric Internet Protocol-based fixed and mobile communications products and solutions.

Zoetis Inc. Class A

Zoetis is a holding company. Through its subsidiaries, the company is engaged in the discovery, development, manufacture and commercialization of animal health medicines, vaccines, and diagnostic products with a focus on both livestock and companion animals. The company operates in two segments: the United States and International. The company's main product categories are vaccines, anti-infectives, parasiticides, other pharmaceutical products, dermatology products, medicated feed additives, and animal health diagnostics. The company's other non-pharmaceutical product categories include nutritionals and agribusiness, as well as products and services including biodevices, genetic tests and precision livestock farming.

Provider
Ascendere Associates LLC
Ascendere Associates LLC

J. Stephen Castellano founded Ascendere Associates LLC to provide innovative equity research and investment advisory services that blends fundamental and quantitative approaches.

In general, our approach is quite simple -- we believe that return on invested capital and long-term earnings growth are key to stock valuation.  More specifically, we use powerful and unique financial models that combine publicly available data, consensus estimates and our own inputs to generate consistent and actionable stock recommendations. 

Among the services that Ascendere provides are: 1) detailed custom equity research analysis; 2) valuation scenario analysis studies; 3) long/short model portfolio strategies; 4) long and short idea generation; 5) portfolio feedback; 6) detailed fundamental financial modeling services; and 7) additional analytical consulting services. Recent financial modeling consulting clients have included several notable startups as well as BCG Platinion, the risk management division of Boston Consulting Group.  

Mr. Castellano has over 20 years of experience in equity research and related consulting work.  At PaineWebber, Warburg Dillon Read and Credit Lyonnais Securities he developed fundamental equity valuation models and conducted in-depth research on the steel and telecom services industries.  At Boston Private Value Investors, he developed quantitative models for stock idea generation and also provided general fundamental equity research coverage. Steve received a MBA from the F. W. Olin School of Business at Babson College (2005) and a BA from Oberlin College (1993). 

Mr. Castellano's career history is highlighted below:

  • Ascendere Associates, LLC (2009-Present)
  • Boston Private Value Investors , Equity Research, Equity Research Analyst (2005-2009)
  • Pyramid Research, Contract Consultant, Telecom Services (2002-2003)
  • Credit Lyonnais Securities (USA), Equity Research, Telecom Services, Vice President (2000-2001)
  • Warburg Dillon Read, Equity Research, Telecom Services, Research Associate (1999-2000)
  • PaineWebber, Equity Research, Steel and Nonferrous Metals, Research Associate, Editor (1995-1999)

Other Reports on these Companies
Other Reports from Ascendere Associates LLC

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