
Credit Suisse's 11 Positive 'Out on a Limb' Stock Ideas
Looking for some out-of-the-box investment ideas? Consider Credit Suisse's contrarian stock list.
A March 24 report by Credit Suisse identified companies for which the opinions of its equity analysts differed from the consensus view on each stock, noting "companies where our analysis reveals opportunities that the market has not yet priced in."
The report, titled "Out on a Limb: 23 Contrarian Stock Ideas," considered stocks in Credit Suisse's U.S. coverage universe. It focused on ratings and earnings projections, as well as a high "conviction level" from equity analysts. The report identified 23 stocks in total, of which analysts were more optimistic than Wall Street about 11 (all rated outperform) and more pessimistic about 12 (all rated underperform).
Here is the list of 11 stocks Credit Suisse likes more than the Street does.
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![Caterpillar manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives worldwide. It has a market cap of $43.7 billion.Credit Suisse has an outperform rating on the stock and a price target of $72. The analysts expect a profit of $3.50 a share for 2016, compared with a consensus estimate for $3.64 a share, according to Thomson Reuters.Despite "continued pressure on end markets, CAT continues to manage towards its decremental margin target between 25-30% while dealing with headwinds from mix and maintaining [research and development] spend at record levels," Credit Suisse analysts said. "While CAT is committed to its outlook provided on the Q4'15 EPS call, if demand were to deteriorate further, there are levers to pull including incremental restructuring, R&D and capex to maintain the 25%-30% decremental. This would be in addition to the restructuring actions announced September 2015 that will take out [approximately] $1.5B in costs (half is SG&A) over the next several years.""Finally, CAT has good visibility for Solar sales in 2H'16 which should be a margin / mix tailwind. Given the additional levers CAT has left to pull we feel confident that trough earnings should hold around $3.50 and would expect to see better EPS leverage once end markets move off of their low base today," the analysts said.](https://www.thestreet.com/.image/c_fill%2Ccs_srgb%2Cg_face%2Ch_80%2Cq_auto:good%2Cw_80/MTY4NjQ5NDkxODk2ODA0OTk5/caterpillar.png)



![Autodesk makes software for the manufacturing, architecture, building, construction, media and entertainment industries. It has a market cap of $12.7 billion.Credit Suisse has an outperform rating on the stock and a price target of $100. The analysts expect a loss of 61 cents a share for 2016 compared with consensus estimates for a loss of 71 cents a share, according to Thomson Reuters."We had previously expected Autodesk's business model transition to result in meaningful long-term upside to revenue (at limited incremental cost) versus consensus estimates, driving 'normalized' earnings power of at least $8.00 per share in FY2023," Credit Suisse said. "However, Autodesk's increased focus on expenses provides further operating leverage to the company's post-transition business model. As such, we now estimate post-transition earnings power of over $10.00 per share and [free cash flow] per share of nearly $11.00 in FY2023."](https://www.thestreet.com/.image/c_fill%2Ccs_srgb%2Cg_face%2Ch_80%2Cq_auto:good%2Cw_80/MTY4NjQ5NDkyMTY0Mzg4NDg3/autodesk.png)
![Box provides a cloud-based enterprise content collaboration platform that enables organizations of various sizes to access, store, share, and manage their content/information. It has a market cap of $1.5 billion.Credit Suisse has an outperform rating on the stock and a price target of $24. The analysts expect a loss of 83 cents a share for 2016 compared with consensus estimates for a loss of 84 cents a share, according to Thomson Reuters."We view Box as currently having a more appealing [file sync and share] FSS product than Microsoft , a key competitor, and believe the company has sufficient lead time to further improve its competitive position and expand its user base-mitigating some of the near- to medium-term competitive risk," Credit Suisse said. "Furthermore, we view Box's business model as scalable, with its high renewal rate and land-and-expand model leading to improvements in long-term operating margin and cash flow."](https://www.thestreet.com/.image/c_fill%2Ccs_srgb%2Cg_face%2Ch_80%2Cq_auto:good%2Cw_80/MTY4NjQ5NDkyMTY1NzY0NzQz/box.png)
![Kellogg manufactures and markets ready-to-eat cereal and convenience foods. It has a market cap of $26.7 billion.Credit Suisse has an outperform rating on the stock and a price target of $82. The analysts expect a profit of $3.71 a share for 2016, compared with a consensus estimate of $3.70 a share, according to Thomson Reuters."We believe Kellogg represents the best risk-reward in our space," Credit Suisse said. "The savings from restructuring and ZBB [zero-based budgeting] provide unique visibility into 7-9% EPS growth and we expect the pipeline of new innovation for the Kashi brand and stronger DSD sales for snacks to drive stronger performance as the year progresses."With the stock trading at a valuation discount to peers on a P/E basis and having almost zero support from the sell side, Kellogg has a long runway for positive ratings revisions as it attempts to regain its blue-chip status. We expect the benefits from SG&A leverage, including the implementation of zero-based budgeting across its business geographically to more than offset investment in improving the quality of its food and sets the table for strong operational leverage in 2016."](https://www.thestreet.com/.image/c_fill%2Ccs_srgb%2Cg_face%2Ch_80%2Cq_auto:good%2Cw_80/MTY4NjQ5NDkxODk2NzM5NDYz/kellogg.png)


