Goldman Sachs Picks 25 Stocks With the Most Upside Potential

NEW YORK (TheStreet) -- Goldman Sachs Group (GS) just released a new report with stocks that have the most upside potential. The investment bank believes "the U.S. economy will avoid recession in 2016."

The S&P 500 fell 11% since its record high reached last May, however, Goldman Sachs analyst David Kostin predicts a rebound is more likely than not, much like in 1998. The trigger for the stock correction is China's faltering economic growth. Support for a market bounce back will be provided by the uninterrupted economic growth in the U.S.

Kostin suggests that companies that derive most of their revenues in the U.S. will do well. He also suggests that after a stock market correction such as the current market situation, investors should over-weigh financial and information technology stocks, and under-weigh energy, materials, utilities and consumer staples.

Taking into account the 12-month stock price targets placed on them by Goldman analysts, here are 25 stocks with the most upside potential, according to the note. (Target prices were obtained from Bloomberg.) TheStreet paired Goldman's picks with ratings from TheStreet Ratings.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Note: Year-to-date returns are based on closing prices on August 25, 2015 at 1:00pm.

KMX Chart KMX data by YCharts
25. CarMax, Inc.
( KMX)
Sector: Consumer Discretionary
Year-to-date return: -10.5%

Goldman Sachs Rating and Target Price: Buy, $78
Upside to Target: 35%
Total Return since May 21: 20%

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates in two segments, CarMax Sales Operations and CarMax Auto Finance.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate CARMAX INC (KMX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CARMAX INC has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CARMAX INC increased its bottom line by earning $2.73 versus $2.17 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.73).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 156.22% to $117.55 million when compared to the same quarter last year. In addition, CARMAX INC has also vastly surpassed the industry average cash flow growth rate of -2.00%.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
M Chart M data by YCharts
24. Macy's, Inc.
( M)
Sector: Consumer Discretionary
Year-to-date return: -11.3%

Goldman Sachs Rating and Target Price: Buy, $73
Upside to Target: 28%
Total Return since May 21: 15%

Macy's, Inc., together with its subsidiaries, operates stores and Internet Websites in the United States. Its stores and Websites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods.

TheStreet Ratings: Buy, A-
TheStreet Ratings Said: "We rate MACY'S INC (M) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • After a year of stock price fluctuations, the net result is that M's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MACY'S INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MACY'S INC increased its bottom line by earning $4.27 versus $3.90 in the prior year. This year, the market expects an improvement in earnings ($4.71 versus $4.27).
  • 40.86% is the gross profit margin for MACY'S INC which we consider to be strong. Regardless of M's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.55% trails the industry average.
  • M, with its decline in revenue, slightly underperformed the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Multiline Retail industry average. The net income has significantly decreased by 25.7% when compared to the same quarter one year ago, falling from $292.00 million to $217.00 million.


WFM Chart WFM data by YCharts
23. Whole Foods Market, Inc. (WFM)

Sector: Consumer Staples
Year-to-date return: -35.3%

Goldman Sachs Rating and Target Price: Neutral, $41
Upside to Target: 29%
Total Return since May 21: 25%

Whole Foods Market, Inc. operates as a retailer of natural and organic foods.

TheStreet Ratings: Hold, C
TheStreet Ratings Said: "We rate WHOLE FOODS MARKET INC (WFM) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food & Staples Retailing industry average. The net income increased by 1.3% when compared to the same quarter one year prior, going from $151.00 million to $153.00 million.
  • WFM's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market on the basis of return on equity, WHOLE FOODS MARKET INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • WFM has underperformed the S&P 500 Index, declining 13.99% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
CHK Chart CHK data by YCharts
22. Chesapeake Energy Corporation (CHK)

Sector: Energy
Year-to-date return: -66.5%

Goldman Sachs Rating and Target Price: Neutral, $10.50
Upside to Target: 59%
Total Return since May 21: 57%

Chesapeake Energy Corporation produces oil and natural gas through acquisition, exploration, and development of from underground reservoirs in the United States.

TheStreet Ratings: Sell, D
TheStreet Ratings Said: "We rate CHESAPEAKE ENERGY CORP (CHK) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 2250.8% when compared to the same quarter one year ago, falling from $191.00 million to -$4,108.00 million.
  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CHK maintains a poor quick ratio of 0.70, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHESAPEAKE ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $314.00 million or 76.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 72.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2950.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.


SWN Chart SWN data by YCharts
21. Southwestern Energy Company (SWN)

Sector: Energy
Year-to-date return: -44.4%

Goldman Sachs Rating and Target Price: Neutral, $24
Upside to Target: 57%
Total Return since May 21: 44%

Southwestern Energy Company explores, develops, and produces natural gas and oil in the United States. The company operates in two segments, Exploration, Development and Production; and Midstream Services.

TheStreet Ratings: Hold, C-
TheStreet Ratings Said: "We rate SOUTHWESTERN ENERGY CO (SWN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that SWN's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 26.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 36.91% is the gross profit margin for SOUTHWESTERN ENERGY CO which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SWN's net profit margin of -103.14% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $399.00 million or 31.81% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
RRC Chart RRC data by YCharts
20. Range Resources Corporation (RRC)

Sector: Energy
Year-to-date return: -35.7%

Goldman Sachs Rating and Target Price: Neutral, $53
Upside to Target: 60%
Total Return since May 21: 43%

Range Resources Corporation, an independent natural gas, natural gas liquids (NGLs), and oil company, engages in the acquisition, exploration, and development of natural gas and oil properties in the United States.

TheStreet Ratings: Hold, C
TheStreet Ratings Said: "We rate RANGE RESOURCES CORP (RRC) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RRC, with its decline in revenue, underperformed when compared the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 49.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RANGE RESOURCES CORP's return on equity is below that of both the industry average and the S&P 500.
  • RANGE RESOURCES CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, RANGE RESOURCES CORP increased its bottom line by earning $3.78 versus $0.70 in the prior year. For the next year, the market is expecting a contraction of 92.1% in earnings ($0.30 versus $3.78).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 169.2% when compared to the same quarter one year ago, falling from $171.39 million to -$118.59 million.
  • The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.


COG Chart COG data by YCharts
19. Cabot Oil & Gas Corporation
( COG)
Sector: Energy
Year-to-date return: -23.3%

Goldman Sachs Rating and Target Price: Buy, $38
Upside to Target: 73%
Total Return since May 21: 37%

Cabot Oil & Gas Corporation, an independent oil and gas company, develops, exploits, explores for, produces, and markets natural gas, oil, and natural gas liquids in the United States.

TheStreet Ratings: Hold, C-
TheStreet Ratings Said: "We rate CABOT OIL & GAS CORP (COG) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • COG, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 42.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CABOT OIL & GAS CORP is rather high; currently it is at 51.39%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, COG's net profit margin of -8.98% significantly underperformed when compared to the industry average.
  • CABOT OIL & GAS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CABOT OIL & GAS CORP reported lower earnings of $0.24 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.24).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CABOT OIL & GAS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 123.2% when compared to the same quarter one year ago, falling from $118.42 million to -$27.51 million.
PXD Chart PXD data by YCharts
18. Pioneer Natural Resources Company
( PXD)
Sector: Energy
Year-to-date return: -25.3%

Goldman Sachs Rating and Target Price: Buy, $192
Upside to Target: 73%
Total Return since May 21: 29%

Pioneer Natural Resources Company engages in the exploration and production of oil and gas in the United States. The company produces and sells oil, natural gas liquids (NGLs), and gas.

TheStreet Ratings: Hold, C-
TheStreet Ratings Said: "We rate PIONEER NATURAL RESOURCES CO (PXD) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PXD's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 27.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 45.07% is the gross profit margin for PIONEER NATURAL RESOURCES CO which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, PXD's net profit margin of -26.20% significantly underperformed when compared to the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 481.57% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has significantly decreased to $328.00 million or 54.25% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.


OKE Chart OKE data by YCharts
17. ONEOK, Inc. ( OKE)
Sector: Energy
Year-to-date return: -34.4%

Goldman Sachs Rating and Target Price: Neutral, $45
Upside to Target: 40%
Total Return since May 21: 28%

ONEOK, Inc., through its general partner interests in ONEOK Partners, L.P., engages in the gathering, processing, storage, and transportation of natural gas in the United States.

TheStreet Ratings: Hold, C
TheStreet Ratings Said: "We rate ONEOK INC (OKE) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 24.2% when compared to the same quarter one year prior, going from $61.59 million to $76.51 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ONEOK INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 30.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • OKE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.52%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, OKE is still more expensive than most of the other companies in its industry.
  • The debt-to-equity ratio is very high at 17.05 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.35, which clearly demonstrates the inability to cover short-term cash needs.
MPC Chart MPC data by YCharts
16. Marathon Petroleum Corporation
( MPC)
Sector: Energy
Year-to-date return: 1.68%

Goldman Sachs Rating and Target Price: Buy, $67
Upside to Target: 46%
Total Return since May 21: 11%

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, marketing, retailing, and transporting petroleum products primarily in the United States. It operates through three segments: Refining & Marketing, Speedway, and Pipeline Transportation.

TheStreet Ratings: Buy, A
TheStreet Ratings Said: "We rate MARATHON PETROLEUM CORP (MPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MARATHON PETROLEUM CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $994.00 million or 13.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.54%.
  • MARATHON PETROLEUM CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MARATHON PETROLEUM CORP increased its bottom line by earning $4.42 versus $3.31 in the prior year. This year, the market expects an improvement in earnings ($5.68 versus $4.42).


NAVI Chart NAVI data by YCharts
15. Navient Corporation ( NAVI)
Sector: Financials
Year-to-date return: -41.6%

Goldman Sachs Rating and Target Price: Neutral, $19
Upside to Target: 45%
Total Return since May 21: 32%

Navient Corporation provides financial products and services in the United States. The company operates in four segments: FFELP Loans, Private Education Loans, Business Services, and Other.

TheStreet Ratings: Hold, C
TheStreet Ratings Said: "We rate NAVIENT CORP (NAVI) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, NAVIENT CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for NAVIENT CORP is rather high; currently it is at 66.72%. Regardless of NAVI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.18% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 40.7% when compared to the same quarter one year ago, falling from $307.00 million to $182.00 million.
  • The debt-to-equity ratio is very high at 33.94 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
ETFC Chart ETFC data by YCharts
14. E*TRADE Financial Corporation (ETFC)

Sector: Financials
Year-to-date return: 3.8%

Goldman Sachs Rating and Target Price: Buy, $35
Upside to Target: 45%
Total Return since May 21: 19%

E*TRADE Financial Corporation, a financial services company, provides brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand name. It operates through two segments, Trading and Investing, and Balance Sheet Management.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate E TRADE FINANCIAL CORP (ETFC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • E TRADE FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, E TRADE FINANCIAL CORP increased its bottom line by earning $1.00 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $1.00).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 323.2% when compared to the same quarter one year prior, rising from $69.00 million to $292.00 million.
  • Net operating cash flow has significantly increased by 107.44% to $919.00 million when compared to the same quarter last year. In addition, E TRADE FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -433.20%.
  • 41.39% is the gross profit margin for E TRADE FINANCIAL CORP which we consider to be strong. Regardless of ETFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ETFC's net profit margin of 59.83% significantly outperformed against the industry.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.


LNC Chart LNC data by YCharts
13. Lincoln National Corporation (LNC)
Sector: Financials
Year-to-date return: -14.6%

Goldman Sachs Rating and Target Price: Neutral, $65
Upside to Target: 35%
Total Return since May 21: 18%

Lincoln National Corporation, through its subsidiaries, engages in multiple insurance and retirement businesses in the United States. It operates through Annuities, Retirement Plan Services, Life Insurance, and Group Protection segments.

TheStreet Ratings: Buy, A
TheStreet Ratings Said: "We rate LINCOLN NATIONAL CORP (LNC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 14.9%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 164.81% to $286.00 million when compared to the same quarter last year. In addition, LINCOLN NATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -46.73%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, LINCOLN NATIONAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • LINCOLN NATIONAL CORP's earnings per share declined by 8.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LINCOLN NATIONAL CORP increased its bottom line by earning $5.66 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($6.00 versus $5.66).
BXP Chart BXP data by YCharts
12. Boston Properties, Inc. (BXP)

Sector: Financials
Year-to-date return: -12.1%

Goldman Sachs Rating and Target Price: Buy, $150
Upside to Target: 34%
Total Return since May 21: 15%

Boston Properties, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in the ownership and development of office properties.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate BOSTON PROPERTIES INC (BXP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $241.63 million or 30.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.86%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 3.5% when compared to the same quarter one year prior, going from $79.30 million to $82.08 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BOSTON PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that BXP's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.


KEY Chart KEY data by YCharts
11. KeyCorp (KEY)
Sector: Financials
Year-to-date return: -5.1%

Goldman Sachs Rating and Target Price: Neutral, $16.50
Upside to Target: 28%
Total Return since May 21: 13%

KeyCorp operates as the bank holding company for KeyBank National Association that provides various retail and commercial banking services to individual, corporate, and institutional clients in the United States.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate KEYCORP (KEY) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • KEY's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 8.7% when compared to the same quarter one year prior, going from $219.00 million to $238.00 million.
  • Net operating cash flow has significantly increased by 985.04% to $1,161.00 million when compared to the same quarter last year. In addition, KEYCORP has also vastly surpassed the industry average cash flow growth rate of 631.13%.
  • KEYCORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KEYCORP increased its bottom line by earning $1.04 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $1.04).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
RF Chart RF data by YCharts
10. Regions Financial Corporation (RF)

Sector: Financials
Year-to-date return: -13%

Goldman Sachs Rating and Target Price: Buy, $12
Upside to Target: 34%
Total Return since May 21: 12%

Regions Financial Corporation, together with its subsidiaries, provides banking and bank-related services to individual and corporate customers in the United States.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate REGIONS FINANCIAL CORP (RF) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RF's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $473.00 million or 46.89% when compared to the same quarter last year. Despite an increase in cash flow of 46.89%, REGIONS FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 631.13%.
  • The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 90.89%. Regardless of RF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RF's net profit margin of 20.60% compares favorably to the industry average.
  • After a year of stock price fluctuations, the net result is that RF's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • REGIONS FINANCIAL CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. Despite the past stability of earnings, the consensus estimate anticipates a weakening in earnings. During the past fiscal year, REGIONS FINANCIAL CORP's EPS of $0.78 remained unchanged from the prior years' EPS of $0.78. For the next year, the market is expecting a contraction of 1.3% in earnings ($0.77 versus $0.78).


DFS Chart DFS data by YCharts
9. Discover Financial Services (DFS)
Sector: Financials
Year-to-date return: -18.5%

Goldman Sachs Rating and Target Price: Buy, $65
Upside to Target: 24%
Total Return since May 21: 12%

Discover Financial Services operates as a direct banking and payment services company in the United States. It operates in two segments, Direct Banking and Payment Services.

TheStreet Ratings: Buy, B+
TheStreet Ratings Said: "We rate DISCOVER FINANCIAL SVCS INC (DFS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 49.80% is the gross profit margin for DISCOVER FINANCIAL SVCS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.09% is above that of the industry average.
  • DISCOVER FINANCIAL SVCS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DISCOVER FINANCIAL SVCS INC reported lower earnings of $4.90 versus $4.96 in the prior year. This year, the market expects an improvement in earnings ($5.25 versus $4.90).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Consumer Finance industry average. The net income has decreased by 7.0% when compared to the same quarter one year ago, dropping from $644.00 million to $599.00 million.
ANTM Chart ANTM data by YCharts
8. Anthem, Inc. (ANTM)

Sector: Health Care
Year-to-date return: 13.7%

Goldman Sachs Rating and Target Price: Neutral, $168
Upside to Target: 19%
Total Return since May 21: 14%

Anthem, Inc., through its subsidiaries, operates as a health benefits company in the United States. It operates through three segments: Commercial and Specialty Business, Government Business, and Other.

TheStreet Ratings: Buy, A+
TheStreet Ratings Said: "We rate ANTHEM INC (ANTM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ANTM's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ANTM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ANTHEM INC has improved earnings per share by 22.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANTHEM INC increased its bottom line by earning $8.95 versus $8.66 in the prior year. This year, the market expects an improvement in earnings ($10.20 versus $8.95).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 17.5% when compared to the same quarter one year prior, going from $731.10 million to $859.10 million.


CSX Chart CSX data by YCharts
7. CSX Corporation (CSX)

Sector: Industrials
Year-to-date return: -27.4%

Goldman Sachs Rating and Target Price: Neutral, $34
Upside to Target: 29%
Total Return since May 21: 26%

CSX Corporation, together with its subsidiaries, provides rail-based transportation services in the United States and Canada. It offers traditional rail services, and transports intermodal containers and trailers.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate CSX CORP (CSX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CSX CORP has improved earnings per share by 5.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CSX CORP increased its bottom line by earning $1.93 versus $1.83 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $1.93).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 4.5% when compared to the same quarter one year prior, going from $529.00 million to $553.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • 42.40% is the gross profit margin for CSX CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.04% trails the industry average.
NSC Chart NSC data by YCharts
6. Norfolk Southern Corporation (NSC)

Sector: Industrials
Year-to-date return: -31.4%

Goldman Sachs Rating and Target Price: Neutral, $91
Upside to Target: 22%
Total Return since May 21: 22%

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. As of December 31, 2014, it operated approximately 20,000 miles of road in 22 states and the District of Columbia.

TheStreet Ratings: Buy, B-
TheStreet Ratings Said: "We rate NORFOLK SOUTHERN CORP (NSC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has slightly increased to $868.00 million or 2.23% when compared to the same quarter last year. Despite an increase in cash flow, NORFOLK SOUTHERN CORP's average is still marginally south of the industry average growth rate of 7.79%.
  • 39.29% is the gross profit margin for NORFOLK SOUTHERN CORP which we consider to be strong. Regardless of NSC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.96% trails the industry average.
  • NSC, with its decline in revenue, slightly underperformed the industry average of 6.9%. Since the same quarter one year prior, revenues fell by 10.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.


UNP Chart UNP data by YCharts
5. Union Pacific Corporation (UNP)
Sector: Industrials
Year-to-date return: -30.2%

Goldman Sachs Rating and Target Price: Buy, $117
Upside to Target: 42%
Total Return since May 21: 21%

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates railroads in the United States.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate UNION PACIFIC CORP (UNP) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins, good cash flow from operations and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 45.05% is the gross profit margin for UNION PACIFIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.17% is above that of the industry average.
  • Net operating cash flow has increased to $1,709.00 million or 17.53% when compared to the same quarter last year. In addition, UNION PACIFIC CORP has also modestly surpassed the industry average cash flow growth rate of 7.79%.
JBHT Chart JBHT data by YCharts
4. J.B. Hunt Transport Services, Inc. (JBHT)

Sector: Industrials
Year-to-date return: -10.8%

Goldman Sachs Rating and Target Price: Neutral, $89
Upside to Target: 19%
Total Return since May 21: 13%

J.B. Hunt Transport Services, Inc., together with its subsidiaries, provides surface transportation and delivery services in the continental United States, Canada, and Mexico.

TheStreet Ratings: Buy, A-
TheStreet Ratings Said: "We rate HUNT (JB) TRANSPRT SVCS INC (JBHT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HUNT (JB) TRANSPRT SVCS INC has improved earnings per share by 11.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HUNT (JB) TRANSPRT SVCS INC increased its bottom line by earning $3.17 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($3.64 versus $3.17).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 10.7% when compared to the same quarter one year prior, going from $93.41 million to $103.42 million.
  • Net operating cash flow has increased to $197.99 million or 39.47% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.79%.
  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.9%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

FSLR Chart FSLR data by YCharts
3. First Solar, Inc. (FSLR)
Sector: Information Technology
Year-to-date return: 5.8%

Goldman Sachs Rating and Target Price: Neutral, $55
Upside to Target: 26%
Total Return since May 21: 22%

First Solar, Inc. provides solar energy solutions worldwide. The company operates through two segments, Components and Systems. The Components segment designs, manufactures, and sells solar modules that convert sunlight into electricity.

TheStreet Ratings: Buy, B-
TheStreet Ratings Said: "We rate FIRST SOLAR INC (FSLR) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FSLR's very impressive revenue growth greatly exceeded the industry average of 10.5%. Since the same quarter one year prior, revenues leaped by 64.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FSLR's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FSLR has a quick ratio of 2.45, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 1986.8% when compared to the same quarter one year prior, rising from $4.53 million to $94.49 million.
  • Net operating cash flow has significantly increased by 87.42% to $221.88 million when compared to the same quarter last year. In addition, FIRST SOLAR INC has also vastly surpassed the industry average cash flow growth rate of -42.41%.
ADS Chart ADS data by YCharts
2. Alliance Data Systems Corporation (ADS)

Sector: Information Technology
Year-to-date return: -9.7%

Goldman Sachs Rating and Target Price: Neutral, $310
Upside to Target: 25%
Total Return since May 21: 17%

Alliance Data Systems Corporation provides marketing and loyalty solutions in the United States and internationally. The company operates through three segments: LoyaltyOne, Epsilon, and Private Label Services and Credit.

TheStreet Ratings: Buy, B
TheStreet Ratings Said: "We rate ALLIANCE DATA SYSTEMS CORP (ADS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 21.7%. Since the same quarter one year prior, revenues rose by 18.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 52.78% to $389.11 million when compared to the same quarter last year. In addition, ALLIANCE DATA SYSTEMS CORP has also vastly surpassed the industry average cash flow growth rate of -2.02%.
  • ALLIANCE DATA SYSTEMS CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALLIANCE DATA SYSTEMS CORP increased its bottom line by earning $7.87 versus $7.43 in the prior year. This year, the market expects an improvement in earnings ($15.01 versus $7.87).
  • 40.26% is the gross profit margin for ALLIANCE DATA SYSTEMS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.75% trails the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income has decreased by 4.4% when compared to the same quarter one year ago, dropping from $137.44 million to $131.34 million.


PAYX Chart PAYX data by YCharts
1. Paychex, Inc. (PAYX)

Sector: Information Technology
Year-to-date return: -3.9%

Goldman Sachs Rating and Target Price: Neutral, $52
Upside to Target: 18%
Total Return since May 21: 12%

Paychex, Inc. provides payroll, human resource, insurance, and benefits outsourcing solutions for small to medium-sized businesses in the United States and Germany

TheStreet Ratings: Buy, A
TheStreet Ratings Said: "We rate PAYCHEX INC (PAYX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 21.7%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PAYCHEX INC has improved earnings per share by 10.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PAYCHEX INC increased its bottom line by earning $1.84 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $1.84).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 10.5% when compared to the same quarter one year prior, going from $145.90 million to $161.20 million.
  • The gross profit margin for PAYCHEX INC is currently very high, coming in at 74.56%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.28% is above that of the industry average.
  • Net operating cash flow has increased to $202.40 million or 15.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.02%.

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