Publish date:

Analysts' Five Favorite Stocks: Time to Buy?

Apple, Thermo Fisher, Activision and Herbalife are some of analysts' favorite stocks. Given the recent pullback, it might be time to buy.
Author:

BOSTON (TheStreet) -- These five stocks have earned "buy" ratings from most of the analysts who cover them. If the stock rally resumes, they are likely to outpace indices.

5.

Herbalife

(HLF) - Get Herbalife Nutrition Ltd. Report

sells weight management, nutritional supplement and energy products. Its shares have fallen 8% in the past month.

Quarter

: First-quarter profit increased 25% to $52 million, or 83 cents a share, as revenue grew 19%. The operating margin widened from 12% to 14%. Herbalife has $166 million of cash and $247 million of debt, translating to a debt-to-equity ratio of 0.7.

Stock

: Herbalife has advanced 55% during the past year, outperforming U.S. indices. It trades at a price-to-projected-earnings ratio of 10 and a price-to-cash-flow ratio of 9.1, 33% and 17% discounts to peer averages. It's also cheap based on sales.

Consensus

: Of analysts covering Herbalife, eight, or 89%, advise purchasing its shares and one recommends holding them.

Consumer Equity Research

expects the stock to climb 72% to $76.

D.A. Davidson

predicts that the shares will rise to $62.

4.

McDermott International

(MDR) - Get McDermott International, Inc. Report

is an engineering company focused on offshore oil and gas and power generation. Its stock has dropped 22% during the past month.

Quarter

: First-quarter profit dropped 23% to $60 million, or 26 cents, as revenue fell 21%. The operating margin declined from 8.3% to 6.7%. The company has $872 million of cash, converting to a quick ratio of 0.9, and $69 million of debt.

Stock

: McDermott has appreciated 8% during the past year, lagging behind benchmarks. It sells for a price-to-projected-earnings ratio of 9.9 and a price-to-sales ratio of 0.9, 32% and 25% discounts to industry averages. It's costly based on cash flow.

Consensus

: Of researchers following McDermott, 18, or 90%, rate its stock "buy" and two rate it "hold."

Citigroup

(C) - Get Citigroup Inc. Report

offers a price target of $38, leaving a potential 68% return.

Macquarie

(MQBKY)

forecasts that the stock will touch $35.

3.

Activision Blizzard

(ATVI) - Get Activision Blizzard, Inc. Report

designs and sells online, PC, console and hand-held games. Its stock has fallen 9% during the past four weeks.

Quarter

: First-quarter profit doubled to $381 million, or 30 cents, as revenue increased 33% to $1.3 billion. The operating margin stretched from 21% to 39%. Activision Blizzard holds $3.3 billion of cash, translating to a quick ratio of 2.3, and no debt.

Stock

: Activision Blizzard has dropped 8% during the past year, trailing U.S. indices. It trades at a price-to-projected-earnings ratio of 13 and a price-to-book ratio of 1.2, 37% and 73% discounts to peer averages. It's also cheap based on sales.

Consensus

: Of firms rating Activision Blizzard, 28, or 93%, advocate purchasing its shares and two recommend holding them.

RBC

TheStreet Recommends

(RY) - Get Royal Bank of Canada Report

,

Broadpoint

(BPSG)

and

FBR Capital Markets

(FBCM)

offer a target of $16, leaving 52% of potential upside.

2.

Thermo Fisher Scientific

(TMO) - Get Thermo Fisher Scientific Inc. Report

makes analytical instruments for various health care markets. Its stock has fallen 5% during the past month.

Quarter

: First-quarter profit soared 56% to $232 million, or 55 cents, as revenue expanded 19%. The operating margin stretched from 9% to 12%. Thermo Fisher has $1.4 billion of cash and $2.1 billion of debt, equal to a debt-to-equity ratio of 0.1.

Stock

: Thermo Fisher has risen 35% during the past year, beating benchmarks. It sells for a price-to-projected-earnings ratio of 13 and a price-to-book ratio of 1.3, 39% and 56% discounts to industry averages. It's also cheap based on sales.

Consensus

: Of analysts covering Thermo Fisher, 14, or 93%, recommend purchasing its shares and one says to hold them.

Thomas Weisel

(TWPG)

expects the stock to gain 28% to $66.

Deutsche Bank

(DB) - Get Deutsche Bank AG Report

forecasts a gain of 26%.

1.

Apple

(AAPL) - Get Apple Inc. (AAPL) Report

sells iPods, iPhones and computers, including the new iPad tablet. Its stock has declined 7% in the past month.

Quarter

: Fiscal second-quarter profit surged 90% to $3.1 billion, or $3.33, as revenue increased 49% to $13 billion. The operating margin widened from 26% to 29%. Apple has $10 billion of cash, $32 billion of marketable securities and no debt.

Stock

: Apple has returned 92% during the past year, trouncing U.S. stock indices. It trades at a price-to-projected-earnings ratio of 16, on par with the software peer average. The shares are expensive based on book value, sales and cash flow.

Consensus

: Of researchers following Apple, 40, or 91%, rate its stock "buy" and four rate it "hold."

Societe Generale

(SCGLY)

offers the loftiest target of $350, leaving a potential 40% return.

Piper Jaffray

(PJC) - Get Piper Jaffray Companies Report

values Apple at $323.

More Stock Ideas 10 High-Yielders Under $5

-- Reported by Jake Lynch in Boston.