This Day On The Street
Continue to site
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

Morgan Stanley's 50 Stock Picks for 2015 -- Yes, 2015

BOSTON ( TheStreet) -- Dozens of investment banks large and small, from Goldman Sachs to Raymond James, are rattling off their favorite stock picks for the coming year. Morgan Stanley is going long -- to 2015.

The New York-based bank's analysts collected their 50 best stock ideas for three years from now, revisiting an idea the firm originally tried after the market meltdown in late 2008 and early 2009. Morgan Stanley identified companies that it said were likely to extend their competitive advantages, with stocks such as retailer Target (TGT - Get Report) and chipmaker Qualcomm (QCOM) making the cut.

The companies are "likely to emerge with an even more powerful edge when markets and economies stabilize," the analysts wrote in a 72-page research report released Thursday.

For investors, looking beyond 2012 makes sense. After all, the Federal Reserve has already said it will keep interest rates low through June 2013 because of the sluggish economy. Even economists are ratcheting down their growth expectations for countries around the world. Using this list of stocks for 2015, investors could think longer term and feel less threatened by more immediate market events, including a potential sovereign default in the eurozone.

The Morgan Stanley analysts said they focused more on sustainability and the best franchises, not necessarily the most undervalued stocks. The bank said the 50 companies have business models and market positions that would be increasingly differentiated from their competitors by 2015.

Of the 50, 14 make Morgan Stanley's Best Ideas List, a collection of the most attractive stocks in terms of risk-to-reward profile. I've included a graphic of the 36 stocks that Morgan Stanley has picked for 2015, below, and I dove deeper into the 14 stocks that are also on the Best Ideas List.






14. Life Healthcare Group (LTGHF.PK)

Company Profile: Life Healthcare Group is the operator of 63 hospitals in South Africa.

Share Price: 20.40 South African rands (Dec. 15)

Potential Upside: 9% based on a price target of 22.3 South African rands

Morgan Stanley's View: Analyst Andrew Olanow says Life Healthcare is a play on solid underlying defensive growth. The company's high margins still have room for upside, Olanow writes, and that valuation looks reasonable.

"With any price regulations by the South African government for private hospitals delayed until 2014, we see added price pressure as unlikely before 2015," Olanow writes. He adds that the company's excess cash should drive a high dividend yield.

Olanow's base case view is for a 9% increase over the next 12 months. However, his most bullish scenario is that the stock will rise 33% over the next year, while his most bearish view is for a 28% slide in 2012.

The chart below shows shares of Life Healthcare that trade on the Pink Sheets in the U.S., but Morgan Stanley is recommending buying shares on overseas exchanges.

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

Get Adobe Flash player

1 of 8

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
AMZN $375.56 0.00%
BWA $60.72 0.00%
RNR $101.55 0.00%
SLB $92.86 0.00%
TGT $80.02 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs