In this article we are going to take a look at Credit Suisse’s Top 5 Highest-Conviction Picks. In order to see a more detailed list with more stocks, we suggest you take a look at Credit Suisse’s 12 Highest-Conviction Top Picks.
5. Discover Financial Services (NYSE:DFS)
Stock performance since July 2022: 1.18%
Number of Bullish Hedge Funds: 52
On Discover Financial Services (NYSE:DFS) Credit Suisse analysts were bullish on the belief that the company would grow its card balance. However, since then, the price target was revised down from $140 to $120. In the fourth quarter, Discover Financial Services (NYSE:DFS) saw an increase in card accounts of 17% on the year, which helped the company grow its sales by 8%. Overall, in 2022, Discover Financial Services (NYSE:DFS) saw net income of $15.50 per share in 2022. Moreover, the financial company bought back $2.4 billion worth of stock in 2022 and raised its dividend by 20%.
At the end of 2022, there were 52 funds tracked by Insider Monkey holding $1.34 billion worth of stock, a substantial increase from 40 funds with $1.12 billion worth of shares a quarter earlier.
4. Knight-Swift Transportation Holdings Inc (NYSE:KNX)
Stock performance since July 2022: 18.59%
Number of Bullish Hedge Funds: 34
Transportation company Knight-Swift Transportation Holdings Inc (NYSE:KNX) saw its stock appreciate by 18.59% since July 2022. The company’s latest quarterly results showed an EPS of $1.00, missing the estimates by $0.11. For the current year, Knight-Swift Transportation Holdings Inc (NYSE:KNX) expects adjusted EPS between $4.05 and $4.25, and anticipates a more challenging environment in the first half followed by a recovery in the last six months of 2023.
There are 52 investors in our database long Knight-Swift Transportation Holdings Inc (NYSE:KNX) according to the latest round of 13F filings. Among the notable shareholders we can mention Dmitry Balyasny’s Balyasny Asset Management and Cliff Asness’ AQR Capital Management with stakes worth $82.10 million and $76.06 million, respectively.
3. Emerson Electric Co (NYSE:EMR)
Stock performance since July 2022: 8.44%
Number of Bullish Hedge Funds: 32
About Emerson Electric Co (NYSE:EMR), Credit Suisse analysts said that they expected it to post strong free cash flow growth as the company would expand its upstream activity towards international markets. The provider of automation solutions for the manufacturing sector is currently attempting to acquire measurement equipment company National Instruments Corp (NASDAQ:NATI), having submitted a $7.0 billion bid. However, National Instruments announced that two other companies, Fortive Corp (NYSE:FTV) and Keysight Technologies Inc (NYSE:KEYS), can also submit their offers, so an official deal is yet to be announced.
During the fourth quarter, Emerson Electric Co (NYSE:EMR) saw a decline in hedge fund sentiment as the number bullish investors declined to 32 from 48, while the total value of their holdings slid to $780.90 million from $1.15 billion.
2. Motorola Solutions Inc (NYSE:MSI)
Stock performance since July 2022: 36.20%
Number of Bullish Hedge Funds: 38
Then there’s Motorola Solutions Inc (NYSE:MSI), another profitable pick of Credit Suisse, as the stock has advanced by more than 36% since July 2022. Swiss bank’s analysts stated that they had strong conviction in the company’s business model and pipeline, among other things. In the fourth quarter, Motorola Solutions Inc (NYSE:MSI) recorded EPS of $3.60 and revenue of $2.71 billion, topping the consensus estimates by $0.17 and $171.78 million, respectively.
In its fourth quarter investor letter, ClearBridge Investments mentioned Motorola Solutions Inc (NYSE:MSI) as a profitable long-term holding, saying that the company “continues to execute at a high level and should see further upside from stimulus money directed toward public safety investments as well as increasing penetration of its software and services offerings.”
Overall, there were 38 funds bullish on Motorola Solutions Inc (NYSE:MSI) at the end of 2022, up by five over the quarter.
1. Teck Resources Ltd Class B (NYSE:TECK)
Stock performance since July 2022: 22.57%
Number of Bullish Hedge Funds: 62
Last, but not least, Teck Resources Ltd Class B (NYSE:TECK) saw its share price grow by 22.57% since Credit Suisse mentioned it in its July 2022 report, highlighting the strong outlook on the Met Coal and the company’s growth in the copper mining segment. Similarly, hedge funds tracked by Insider Monkey also maintain a bullish sentiment on Teck Resources Ltd Class B (NYSE:TECK) with the number of investors with long positions jumped by 15 to 62 during the fourth quarter of 2022.
Recently, Teck Resources Ltd Class B (NYSE:TECK) has been approached by mining giant Glencore, which made an unsolicited offer to acquire Teck in an all-stock deal. However, Teck Resources Ltd Class B (NYSE:TECK) rejected the transaction as it is planning to restructure its business and create two independent companies by spinning out its steelmaking coal business. The spin-off will allow Teck Resources to focus on metals, in particular copper. Shareholders are expected to vote on the split in April.
