This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Barclays Says Have Most Potential

Stocks in this article: CAH CVS WAG APA QCOM GLW WY

BOSTON ( TheStreet) -- Barclays' (BCS) investment-banking business has been raising share-price targets on its "global top picks" for 2011 in recent weeks, based on robust corporate profits.

At the start of the year, Barclays advised its U.S. investors to take a "more aggressive sector stance" that includes paring exposure to emerging-markets stocks in favor of developed-world companies with significant business in emerging markets. Earnings-per-share results have beaten analysts' estimates at 72% of the 425 companies in the S&P 500 Index that reported results since April 11.

Barclays recommends U.S. industrial, technology and energy stocks on the view toward an "improving domestic growth outlook," and that advice seems to be holding up. The S&P 500 Index of the biggest U.S. stocks is up 7.7% this year through May 10, and 31% over the past 12 months.

Barclays said it expects the materials sector to post 30% growth this year, followed by industrials, at 16%, and energy, at 12%. On the bottom, the utilities sector is expected to fall 1%.

Here are five of Barclays' stock picks with recently updated price targets. The list of 122 global picks for 2011 offer potentially generous premiums:

Cardinal Health (CAH), a leading distributor of pharmaceuticals and medical supplies, is one of Barclays' nine health-care-industry picks.

The company's operations include procurement, inventory-management and logistics services, and it serves customers such as CVS Caremark (CVS) and Walgreen (WAG). Barclays says Cardinal Health is seen as having a renewed sense of focus, helped by acquisitions in the second half of last year. The purchased companies pushed Cardinal Health into faster-growing areas, including a wholesale business that includes new generic products.

"In our view, strengthening Cardinal's generic strategy with the addition of Kinray sets the stage for improved margins as a wave of generic drugs hits the market over the next two to four years," Barclays said. "We see the opportunity for margin expansion in Cardinal's drug segment to drive potential upside in 2011."

Barclays expects Cardinal will earn $2.52 per share in 2011, giving it a projected price-to-earnings ratio of 14.5, but that is seen dropping to a 12.7 P/E ratio in 2012 on earnings of $2.87 per share.

Barclays' current price target of $51 was set April 29. Cardinal's shares are currently trading at $44.80, giving a potential 14% upside. Shares are up 19% this year, making for a market value of $15 billion.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs