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10 Companies That Prove Stock Picking Is Still Alive

10. Teradata (TDC)

Company profile: Teradata, with a market value of $13 billion, is a 32-year-old IT company focused on developing and commercializing data warehousing services to the world's largest 3,000 organizations. It was spun off from NCR Corp. in 2007.

Investor takeaway: Its shares are up 57% this year and have a three-year, average annual return of 43%. Analysts give its shares six "buy" ratings, seven "buy/holds," and seven "holds," according to a survey of analysts by S&P.

S&P has it rated "hold," based on valuation, but adds that "we continue to see many positives for the company." Analysts' consensus estimate is for earnings of $2.80 per share this year, growing by 14% to $3.19 per share next year.

9. Discover Financial Services (DFS)

Company profile: Discover Financial, with a market value of $19 billion, issues credit cards and acquires transactions. It operates a closed-loop credit card network and also uses third parties to issue its cards. The company's sales growth has averaged about 2% a year over the past 14 years.

Dividend Yield: 1%

Investor takeaway: Its shares are up 58% this year and have a three-year, average annual return of 47%. Analysts give its shares 10 "buy" ratings, six "buy/holds," and eight "holds," according to a survey of analysts by S&P.

In March, the company announced a strategy shift toward becoming a more full-service direct-payments provider. Morningstar says the trend of moving from cash and checks to electronic payments, such as credit or debit cards, "is a major tailwind for Discover."

8. Sherwin-Williams Co. (SHW - Get Report)

Company profile: Sherwin-Williams, with a market value of $14 billion, makes paints, coatings and wall coverings worldwide. It is the U.S. market leader, with a 30% share.

Dividend Yield: 1.09%

Investor takeaway: Its shares are up 59% this year and have a three-year, average annual return of 34%. Analysts give its shares one "buy" ratings, one "buy/hold," 11 "holds," and one "weak hold," according to a survey of analysts by S&P.

S&P has it rated "sell" given its high valuation as it has a $112 price target on it, but its shares are at $140. 67. Earnings are strong as analysts' consensus is for $6.36 per share this year, and that they will grow by 19%, to $7.59, next year.

7. Apple (AAPL - Get Report)

Company profile: Apple, with a market value of $621 billion, designs and makes consumer electronic devices, including PCs (Mac), tablets (iPad), phones (iPhone) and portable music players (iPod). Its iTunes online store is the largest music distributor in the world; it sells and rents TV shows and movies, and sells applications for the iPhone and iPad.

Dividend Yield: 0.4%

Investor takeaway: Its shares are up 61% this year and have a three-year, average annual return of 60%. Analysts give its shares 34 "buy" ratings, 15 "buy/holds," three "holds," and two "sells," according to a survey of analysts by S&P.

S&P has it rated "buy" with an $800 price target, a 23% premium to the current price. S&P says its projected earnings growth, large cash position, strong free cash flow generation and relatively high return on equity, continues to make the shares "attractive."

Morningstar analyst Michael Holt writes that, although the company's recent third-quarter results were below expectations "because of an unexpectedly sharp drop in iPhone shipments, we believe the headwinds are primarily short-term in nature and product-cycle driven." He also said that long-term, that "as users become more tethered to Apple's iOS ecosystem rather than a specific device, integrating additional Apple devices into users' routines becomes seamless."

6. Vertex Pharmaceuticals (VRTX)

Company profile: Vertex Pharmaceuticals, with a market value of $12 billion, is a biopharmaceutical company that uses structure-based drug design to discover and develop small molecule therapeutics for the treatment of a wide range of diseases, including hepatitis C and cystic fibrosis.

Investor takeaway: Its shares are up 65% this year and have a three-year, average annual return of 17.5%. Analysts give its shares 10 "buy" ratings, nine "buy/holds," and six "holds," according to a survey of analysts by S&P.

S&P has it rated "buy" with a $62 price target, a 13% premium to its current price. Analysts' consensus estimate is for earnings of $1.82 per share this year, growing by 2% to $1.86 per share next year.
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