It has been a tough year for Edwards Lifesciences Corp (NYSE:EW). The stock has declined 24% in 2013 alone due to disappointing sales.
Canaccord’s Jason Mills came out with a note on Monday saying that he expects the company to prevail in its German patent infringement suit against Medtronic, Inc. (NYSE:MDT). The analyst also upgraded the stock with a “Buy” rating and a $85 price target.
Edwards Lifesciences Corp (NYSE:EW) is a medical equipment company specifically in the cardiovascular space. The company is objecting to Medtronic’s CoreValue product, which is part of a line to aid in the treatment of aortic stenosis patients (those considered inoperable). The market is believed to be $4 billion per year – but the company is in competition with Medtronic, Inc. (NYSE:MDT).
The key is whether or not Edwards Lifesciences can secure its patent disputes, and become the leader in this space. At this point, it is yet to be seen – but Canaccord is taking the side of Edwards Lifesciences Corp (NYSE:EW). Personally, I’d wait to see how it all plays out.
This smartphone supplier is a “Strong Buy”
Last Friday, there were reports that Samsung had issued building cuts of the Galaxy S4. RF Micro Devices, Inc. (NASDAQ:RFMD) is a leading supplier – it immediately traded lower on the news – but Charter Equity is saying “no worries” with its Strong Buy upgrade.
According to the firm, channel checks indicate strong sales and any weakness are focused primarily in Europe. The firm also notes that RF Micro is a supplier for more than just the Galaxy S4, and that growth as a whole is robust.
In addition to its current fundamentals, Charter speculates that RF Micro Devices, Inc. (NASDAQ:RFMD) will win the amplifier design and will maintain the antenna tuner for upcoming iPhones. With both of these developments, Charter sees upside of 160%! RF Micro moved almost 4% on the news.
While I am not sure of the 160% premium awarded, I tend to agree with the reasons of Charter. The smartphone market is growing, and RF Micro plays a pivotal role. During its last quarter alone, the company grew sales nearly 50% year-over-year and trades at just 1.5 times 12 months sales. Therefore, I agree that there is indubitably value present in this stock.
I couldn’t agree more with this call
Stifel has been one of the logical firms who cover Facebook Inc (NASDAQ:FB). In the past, Stifel has not been dictated by price movement when making its calls. Hence, on January 31, when the stock was $31, the firm downgraded the stock to “Hold” as other firms were upgrading the stock. Now, the firm is upgrading to “Buy” and sees value in the future.
According to Stifel, Q2 PC ad sales will see a boost. The firm expects Facebook Inc (NASDAQ:FB) to benefit as companies prepare for back to school marketing campaigns, and believes that Facebook will see strong growth from a competitive market. Furthermore, Stifel predicts Facebook Inc (NASDAQ:FB) being part of the S&P 500 in the immediate future, which could lead to further buying pressure from index funds.
My outlook for Facebook is remarkably similar to Stifel, as I like Facebook below $25 and tend to sell above $30. When you compare Facebook’s price/sales ratio under 11 to others such as LinkedIn (17) and Zillow (14), you can see that there is value in an expensive space. Therefore, I agree and say “buy” Facebook!
Conclusion
“When assessing an analyst’s call, don’t make an investment decision on one opinion – but rather read the notes within the report and incorporate any channel checks as part of your analysis.”
The quote above is from my new book, and I think it is essential when determining how to play the gains that an analyst’s call often creates. Some calls are better than others – as seen with the three calls in this article.
Canaccord may very well be accurate with its call, but at this point it is speculative – such is the case with Charter and its iPhone 5 call with RF Micro.
To me, Stifel made the best call, and has continued to call Facebook Inc (NASDAQ:FB) correctly for the last six months. I think we are seeing positive trends emerge in advertising – and if Facebook is included in the S&P 500, it could cause additional buying pressure. Therefore, I’d use the notes from the analyst and then decide whether or not Facebook (or the others) might fit into your portfolio.
The article Reasons to Buy These 3 Stocks originally appeared on Fool.com and is written by Brian Nichols.
Brian Nichols is long Facebook. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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