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Raymond James' Best Stock Picks May Double in 2012

(Adds comment from CEO on markets next year.)

BOSTON (TheStreet) -- Raymond James (RJF), an investment bank with $271 billion in client assets, said its best stock selections, which include Nvidia (NVDA), may double in the next year.

The bank, more known for owning the naming rights to the NFL's Tampa Bay Buccaneers football stadium in Florida, has had a list of stock ideas that has outperformed larger rivals and benchmarks for more than a decade. Its asset-management unit oversees $32 billion in funds.

The St. Petersburg, Florida-based firm, which doesn't offer updates during the year, says the companies are chosen by its analysts. All companies carry a "buy" rating based on fundamentals, growth prospects and risk. Management's ability to deliver on growth expectations during a slow economic environment also plays a role.

How successful have Raymond James analysts been? In 14 of the previous 15 years, the group of picks outperformed the S&P 500 Index. In the previous decade, they rose 17.5%, better than the S&P 500's 6.2% increase.

Raymond James' 2011 picks were a disappointment, however, with a decline of 1.2%. Most the poor performance was pinned to Bank of America (BAC), which has tumbled more than 60%. On the positive side, Panera Bread (PNRA) has been the best-performing pick of the year, up nearly 30%.

The investing environment has been tough, though, and next year's favorites would have been disappointments in 2011. The group has fallen 3.7% this year, with three names down more than 24%. The S&P 500, a broader measure of the largest stocks in the U.S., has slumped 3.3%. Of Raymond James' group of favorite stocks, Nuance Communications (NUAN) is the best performer so far this year, up 30%, while BMC Software (BMC) lags the most, with a 29% drop.

"Once again, our analysts have been challenged to find the best stocks to own in 2012 from among the approximately 900 companies we actively follow," Chief Investment Officer David Henwood wrote in an introduction to this year's list. The encouraging elements during a year of great market turbulence, Henwood says, are that corporate earnings and cash flows have grown impressively for most companies.

Raymond James' chief executive officer, Paul Reilly, said today on CNBC that he expects "flattish" markets next year as the U.S. and Europe grapple with the same fundamental problems as they did in 2011.

Analysts at Raymond James offer their best picks, with returns expected to be between 15% and 104%, based on price forecasts. The 13 stocks on Raymond James' list are arranged below in order of potential upside, based on the firm's 12-month price target and the stock's price as of Dec. 14.






13. Brinker International (EAT)

Company Profile: Brinker International owns or franchises more than 1,500 casual dining restaurants in 32 countries under the names Chili's Grill & Bar and Maggiano's Little Italy.

Share Price: $24.21 (Dec. 14)

Potential Upside: 15.7% based on a price target of $28

Investment Thesis: Analyst Bryan Elliott says Brinker's is in phase II of its Chili's transformation, which should lead to a big margin and free cash flow opportunity.

"Brinker shares have been range-bound for most of 2011 despite management consistently meeting its goals from Phase I of the transformation (improved labor productivity)," Elliott writes. "We expect similar success with Phase II initiatives (a significant kitchen technology upgrade and a major store remodel program). If we are correct, investor sentiment should improve, which could materially increase EAT's valuation metrics."

Interested in more on Brinker International? See TheStreet Ratings' report card for this stock.

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