A recent study by Da and Schaumburg, published in the
Journal of Financial Markets, shows that
Wall Street analysts
can successfully determine mispriced stocks in a given industry. This doesn't mean that their buy and sell recommendations will yield abnormal returns. It means that when analysts think a stock is undervalued relative to its peers, that stock will likely outperform them. When analysts think a stock is overvalued, it will most likely underperform its peers.
Given that analysts' price targets contain useful information, we have compiled a list of stocks analysts expect to increase the most over the next 12 months. The data are sourced from
A portfolio that is long the stocks analysts are bullish about the most and short the stocks analysts are bearish about the most returns more than 25% annually. Da and Schaumburg's analysis showed that investors beat the market by buying these stocks. Above are the
40 stocks analysts are insanely bullish about.
Some of these stocks are also favored by hedge funds.
Larry Robbins' Glenview
Medco Health Solutions
John Burbank's Passport Capital
Phil Falcone's Harbinger Capital
are among the hedge funds with
Cliff Natural Resources
(CLF - Get Report)
(C - Get Report)
is the second most popular stock among hedge funds.
Steven Mandel's Lone Pine
Bruce Berkowitz's Fairholme
Lee Ainslie's Maverick Capital
, George Soros,
Bill Miller's Legg Mason Capital Management
Bill Ackman's Pershing Square,
David Tepper's Appaloosa,
Daniel Loeb's Third Point
Andreas Halvorsen's Viking Global
, Richard Perry's Perry Capital,
Joseph DiMenna's Zweig-DiMenna
, Leon Cooperman's Omega Advisors,
John Paulson's Paulson & Co
are among the prominent investors who are bullish about Citigroup.
(MSFT - Get Report)
was owned by 161 hedge funds at the end of last year.
Barry Rosenstein's Jana Partners
David Einhorn's Greenlight Capital
Craig Effron's Scoggin Capital
are some of other hedge funds bullish about Microsoft. Whitney Tilson was extremely bulish about Microsoft too. He predicted Microsoft will reach $35 by the end of 2011.
>>To see these stocks in action, visit the
40 Stocks Analysts Are Insanely Bullish About
portfolio on Stockpickr.
This was originally published on