10. DeVry (DV) is a for-profit educator.
Although it faces near-term regulatory pressures, it is best-positioned within the industry to adapt quickly and regain financial footing in 2011, according to Barclays. The bank forecasts mid-single-digit student growth over the next three years, boosting margins, which will be pressured initially in 2011.
It forecasts 15% to 18% growth in 2011 and 2012. With a four to one ratio of upside reward to downside risk, it thinks the shares are cheap based on expected growth and has a target of $60. DeVry trades at a forward earnings multiple of 9.3 and a cash flow multiple of 8.2, 47% and 20% peer discounts.
9. Western Union (WU) has "among the best risk/rewards profiles" in Barclays coverage universe. It is cheap relative to peer and historical valuations. The transaction processor and money transfer company will benefit from secular growth and a mix shift towards domestic transactions in 2011, which should bolster margins. Its new prepaid card offering is predicted to expand faster than competitors' products. Barclays, known for conservative price targets, sees significant upside to its model for Western Union, if transaction growth exceeds expectations. Of analysts covering the stock, 18, or 67%, rate it "buy", eight rate it "hold" and just one ranks the shares "sell."
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