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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stock Strategies From Wall Street: Feb 7 (Update 1)

Stocks in this article: AA CBG CMI JPM LIFE MOS PCLN TIE COF AXP NAV AGCO AEM TDG FLIR

4) Margins Set Off Good Advertising Agency Stocks From Bad

Deutsche Bank analysts say that a few stocks in the advertising space might be able to distinguish themselves from the pack. Assumptions are conservative for the industry overall, but there's enough evidence to justify a small revenue upgrade, according to the firm:

"We have raised our 2012 organic revenue forecast from 1% to 2.5-3% on average or the sector. In summary, this incorporates -1.5% for Europe, +2-5% U.S., +5-8% rest of the world."

Margins set off good performers from the bad in 2011 and that will likely again be the case this year. Deutsche writes: "We are not saying that margin expansion should be managements' paramount strategic priority: we believe investors, in any case, attach higher importance to organic revenue as the driver of multiples (even though this is not an audited figure). But we do believe that, if revenue growth remains healthy, operating leverage should also be a consideration for the investment case."

The firm is a buyer of European firms Wausau Paper (WPP) and Havas, and New York based Omnicom Group (OMC). For Omnicom, the analysts are targeting $50 per share on the stock. Shares now trade near $47.

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