Brean Capital’s 4 Stocks To Watch In 2015
Uri Gruenbaum | Dec 24, 2014 10:44AM ET
After an eventful 2014, the Brean Capital team came together to pick 28 stocks within each of the firm’s four coverage verticals, Consumer, Healthcare, Natural Resources, and Technology. Based on their choices, below are the 4 top stocks--one from each vertical—to pay attention to in 2015.
Urban Outfitters Inc (NASDAQ:URBN)
Urban Outfitters is a specialty retailer that owns and operates over 400 locations around the world, across five retail brands: Urban Outfitters, Anthropologie, Free People, Terrain, and BHLDN. While Anthropologie and Free People have consistently performed well over the past year, the company’s name brand, Urban Outfitters, has not seen the same positive results.
In addition, Urban outfitters was the topic of controversy earlier this year when it featured for sale on its website a Kent State University sweatshirt with what seemed to be fake bloodstains. This hurt its public reputation since for many customers the product elicited instant associations with the tragic Kent State shootings of 1970. Urban Outfitters denied it had intentionally referenced the shootings and immediately took the sweater off its site in response to the public backlash.
Since then, Urban Outfitters has been diligently working to improve its in-store sales, with retail sales growing by 0.7% in November over the year-ago period. Brean Capital’s Ananda Baruah gave Seagate a Buy rating with an $83 price target, noting “Our broader bullish framework is driven by: 1) EV/FCF valuation, and 2) potential for L-T Industry Gross Margin expansion (at least 100-200 bps over the next few years from both favorable mix and Cap U increases, and perhaps 400-500 bps during the next 5-7 years).” In addition, the analyst notes, “that core business Gross Margins have trended up Y/Y (ex-impact of recent acquisitions) – which is core to our L-T thesis, and we anticipate continued expansion.”
Baruah has rated Seagate 11 other times since October 2009, earning an 89% success rate recommending the stock with a +33.0% average return per recommendation.
Disclosure: All recommendations and success stats from Brean Capital, sourced via TipRanks.
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