Investors may not be as familiar with Chicago-based Barrington Research as they are with Morgan Stanley or Merrill Lynch, but the firm's Best Ideas List outperformed key benchmarks in 2010, when it was first started, and held close to the S&P 500's performance during a volatile 2011.
Barrington's list of favorite stocks is updated quarterly and represents analysts' top picks for the coming 12 months. Since inception on Jan. 1, 2010, Barrington's best stock picks have risen 34.7%, outpacing gains on the S&P 500 (12.8%) and the Russell 2000 (18.5%). That success was challenged in 2011, as the Best Ideas portfolio was down 0.4%, excluding dividends, compared with a little changed S&P 500 and a loss of 5.5% on the Russell 2000.For 2012, strategists at investment banks like Citigroup, Deutsche Bank and Wells Fargo have an average year-end target for the S&P 500 of 1,344, which implies a rise of about 4.1%. By comparison, the average upside implied by the price targets on Barrington's stock picks is 43.5%, which means investors could handily beat the broader market if the analysts at Barrington Research are right. The latest overhaul sees four new additions the group to bring the total to 15 stocks, while Copart (CPRT), Modine Manufacturing (MOD) and U.S. Auto Parts Network (PRTS) have been axed. The 15 stocks now on Barrington's list are arranged below in order of potential upside, based on the firm's 12-month price target and the stock's closing price as of Dec. 31.
15. InnerWorkings (INWK) Company Profile: InnerWorkings is a provider of managed print services to corporate clients across a range of industries. Current Share Price: $9.76 Potential Upside from Dec. 31: 18% based on a price target of $11 Barrington's Take: After a 46% rally in 2011, InnerWorkings remains on the Best Ideas List for 2012 as "there is still substantial upside potential for the stock in 2012 based on continued business momentum." "Due to its value proposition of cost savings and greater efficiency, we believe InnerWorkings remains positioned to perform well in a low growth economic environment," the Barrington analysts write. "We continue to recommend purchase of InnerWorkings based on its market leading technology and service offerings, its first mover advantage and strong competitive positioning, and its low penetration of a large market opportunity."
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