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ID-100203460The beginning of the year is when it seems like every financial website puts out its top or worst stocks. In that vein, I offer my 15 recommended stocks for 2016 – or at least the first quarter of the year. I cannot list the worst stocks, as there are too many of those to list. I can at least list the 15 recommended stocks that will give you a good basis for the first three months of 2016.

Many sites do all year lists, but I am only committing to this list for the first three months. There is a great reason for this. It is almost impossible to predict the market farther out than 3-6 month. In fact, it is quite possible for the market to do a massive correction and even this list would be a fallacy. There is always some risk with any investment and you are encouraged to read this site’s disclaimer before acting on this list.

I would expect all of these companies to maintain their status as Good Companies on my Watch List. I would not expect all of them to make a top 15 recommended stocks list at the end of March. Some of them will grow a bit slower than I expect, and a couple of the 15 recommended stocks are probably going to lose money. As Peter Lynch famously said:

“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”

By Peter’s standards, I hope to right on this list with 12 of these picks. I don’t expect all 15 recommended stocks to be massive growth stocks in the year. I also think the list is successful if the list of 15 beats the S&P 500 and the Dow30. In April, I plan to publish a list for the second quarter of the year.

If we would go back in time (starting from December 1) and buy the 15 recommended stocks 3 years ago our portfolio would have grown very nicely. These stocks would have appreciated by 68.05%. With that track record, we should expect good results in the next 3 months.

All of the stocks on this list are rated as Good Companies using the method that I describe in my book The Confident Investor.  You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.

The 15 recommended stocks were chosen from Good Companies on my Watch List. This means we already know they are fairly well managed and have a history of solid growth. While all of the stocks on the Watch List are Good Companies, these 15 recommended stocks seem to be the most well setup for aggressive growth in the first quarter of 2016.

The 15 recommended stocks for the first quarter of 2016 also performed very well over the past year and the past 3 years. As I have written before, the past is not a perfect indicator of the future, but it is probably the best indicator that we have to use.

I didn’t try to make this list of 15 recommended stocks to be a balanced portfolio covering multiple industries. I am happy to report that it isn’t a terrible unbalanced. The reality is that if you plan to rebalance your portfolio every 3 months then you really do not have to worry too much about industry balance.

If you want a more balanced portfolio, you should have approximately 30% of your portfolio invested in index funds. These funds should be divided by large and small cap funds, an index bond fund, and an index international fund. This would help to balance your portfolio.

You could also look at the Watch List of stocks. These stocks have shown that they are well-run companies. If you are concerned about a balanced portfolio, I suggest that you compliment the 15 recommended stocks with a couple stocks from the Watch List.

The list of 15 recommended stocks for the first quarter of 2016

The list of 15 recommended stocks for the first quarter of 2016 sorted alphabetically by stock symbol are:

  • ABIOMED, Inc. [stckqut]ABMD[/stckqut]
  • China Biologic Products Inc [stckqut]CBPO[/stckqut]
  • Extra Space Storage, Inc. [stckqut]EXR[/stckqut]
  • Facebook Inc [stckqut]FB[/stckqut]
  • Gray Television, Inc. [stckqut]GTN[/stckqut]
  • Jarden Corp [stckqut]JAH[/stckqut]
  • Middleby Corp [stckqut]MIDD[/stckqut]
  • Monster Beverage Corporation [stckqut]MNST[/stckqut]
  • Netflix, Inc. [stckqut]NFLX[/stckqut]
  • Regeneron Pharmaceuticals Inc [stckqut]REGN[/stckqut]
  • Starbucks Corporation [stckqut]SBUX[/stckqut]
  • Constellation Brands, Inc. [stckqut]STZ[/stckqut]
  • Gentherm Inc [stckqut]THRM[/stckqut]
  • Thermo Fisher Scientific Inc. [stckqut]TMO[/stckqut]
  • Under Armour Inc [stckqut]UA[/stckqut]

If you want to know a bit more about the companies that comprise the 15 recommended stocks for the first quarter of 2016, you can read below. The descriptions primarily came from the short paragraph descriptions on the company found on Google Finance. https://www.google.com/finance. The stock price charts also came from Google Finance. You can also click on a company name on the right side of this site, under the heading of Most Reviewed Companies (you may need to scroll down) as most of the companies on this list have been reviewed here several times.

  • ABIOMED, Inc. [stckqut]ABMD[/stckqut]
    • Abiomed, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company’s products include Impella 2.5, a percutaneous micro heart pump with an integrated motor and sensors; Impella CP, which is primarily used by either interventional cardiologists to support patients in the catheter lab or by surgeons in the heart surgery suite; Impella 5.0 and Impella LD, a percutaneous micro heart pumps with integrated motors and sensors for use primarily in the heart surgery suite; Impella RP, a percutaneous catheter-based axial flow pump that is designed to allow greater than four liters of flow per minute; AB5000, a circulatory support system for the temporary support of acute heart failure patients in profound shock, and Symphony, a minimally invasive implantable cardiac assist device.
  • China Biologic Products Inc. [stckqut]CBPO[/stckqut]
    • China Biologic Products, Inc. (China Biologic) is a biopharmaceutical company. The Company is principally engaged in the research, development, manufacturing and sales of human plasma-based biopharmaceutical products in China. China Biologic has a product portfolio with over 20 different dosage forms of plasma products. The Company’s principal products are human albumin and immunoglobulin for intravenous injection (IVIG). China Biologic operates its business through two subsidiaries, namely, Shandong Taibang Biological Products Co. Ltd. and Guizhou Taibang Biological Products Co., Ltd. The Company also holds an interest in Xi’an Huitian Blood Products Co., Ltd., a plasma products company. Its products include human albumin, human immunoglobulin, IVIG, thymopolypeptides injection, human hepatitis B immunoglobulin, human rabies immunoglobulin, human tetanus immunoglobulin, placenta polypeptide, Factor VIII and human prothrombin complex concentrate (PCC).
  • Extra Space Storage, Inc. [stckqut]EXR[/stckqut]
    • Extra Space Storage Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, manages, acquires, develops and redevelops professionally managed self-storage properties (stores). The Company operates through three segments: rental operations; tenant reinsurance, and property management, acquisition and development. The Company’s rental operations activities include rental operations of self-storage stores. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the Company’s self-storage facilities. The Company’s property management acquisition and development activities include managing acquiring developing and selling self-storage stores. As of December 31, 2014, it held ownership interests in 828 operating stores. Of these operating stores, 557 are wholly owned and 271 are owned in joint venture partnerships.
  • Facebook Inc [stckqut]FB[/stckqut]
    • Facebook, Inc. is a social networking company. The Company is engaged in developing products that enables users to connect and share through mobile devices and personal computers. It offers various services focused on people, marketers and developers. It offers various platforms for people to share their opinions, ideas, photos and videos, and to engage in other activities. Its products include Facebook, Instagram, Messenger and WhatsApp. The Facebook mobile app and Website enables people to connect, share, discover and communicate with each other on mobile devices and personal computers. Its Messenger is a mobile-to-mobile messaging application available on iOS and Android phones. Instagram is a mobile application and Website that enables people to take photos or videos, and share them with friends and followers. WhatsApp Messenger is a cross-platform mobile messaging application and allows people to exchange messages on iOS, Android, BlackBerry, Windows Phone and Nokia devices.
  • Gray Television, Inc. [stckqut]GTN[/stckqut]
    • Gray Television Inc. (Gray) is a broadcast company, which owns and/or operates television stations and digital assets in markets throughout the United States. Gray owns and operates television stations in 44 television markets broadcasting 139 program streams including 76 affiliates of the Big Four networks (ABC, CBS, NBC and FOX). Gray’s owned and/or operated stations include 26 channels affiliated with the CBS Network, 24 channels affiliated with the NBC Network, 16 channels affiliated with the ABC Network and 10 channels affiliated with the FOX Network. Gray reaches approximately 8.1% of total United States television households.
  • Jarden Corp [stckqut]JAH[/stckqut]
    • Jarden Corporation (Jarden) is a global consumer products company. The Company operates in three primary business segments: Branded Consumables, Consumer Solutions and Outdoor Solutions. The Branded Consumables segment manufactures or sources, markets and distributes branded consumer products. The Consumer Solutions segment manufactures or sources, markets and distributes household products. The Outdoor Solutions segment manufactures or sources, markets and distributes consumer active lifestyle products. The Company distributes its products through club stores, craft stores, direct-to-consumer channels, on-line, specialty retailers and wholesalers, and Yankee Candle retail stores. The Company’s customers include Walmart, Academy Sports & Outdoors, Amazon.com, Bed Bath and Beyond, Canadian Tire, Costco, Dick’s Sporting Goods, The Home Depot, Kroger, Lowe’s and Target.
  • Middleby Corp [stckqut]MIDD[/stckqut]
    • The Middleby Corporation is engaged in the design, manufacture and sale of commercial foodservice, food processing equipment and residential kitchen equipment. The Company operates in three segments: the Commercial Foodservice Equipment Group has a portfolio of cooking and warming equipment; the Food Processing Equipment Group offers a portfolio of processing solutions for customers producing pre-cooked meat products and the Residential Kitchen Equipment Group manufactures, sells and distributes kitchen equipment for the residential market. The equipment are used in all types of commercial restaurants and institutional kitchens; food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and kitchen equipment, including ranges, ovens, refrigerators, ventilation and dishwashers used in the residential market. Its brands include Anets, Beech, Blodgett, Britannia, CTX, Cozzini, Danfotech, Drake, Brigade, Jade and TurboChef, among others.
  • Monster Beverage Corporation [stckqut]MNST[/stckqut]
    • Monster Beverage Corporation, incorporated on April 25, 1990, is a holding company and conducts no operating business except through its consolidated subsidiaries. The Company’s subsidiaries market and distribute energy drinks, including Monster Energy energy drinks, Monster Energy Extra Strength Nitrous Technology energy drinks, Java Monster non-carbonated coffee + energy drinks, M3 Monster Energy Super Concentrate energy drinks, Monster Rehab non-carbonated energy drinks with electrolytes, Muscle Monster Energy Shakes, Ubermonster energy drinks, NOS energy drinks, Full Throttle energy drinks, Burn energy drinks, Samurai energy drinks, Relentless energy drinks, Mother energy drinks, Power Play energy drinks, BU energy drinks, Nalu energy drinks, BPM energy drinks, Gladiator energy drinks, and Ultra energy drinks.
  • Netflix, Inc. [stckqut]NFLX[/stckqut]
    • Netflix, Inc. is a provider of Internet television network. The Company has over 57 million streaming members in over 50 countries. Its members can watch more than two billion hours of television (TV) shows and movies per month, including original series, documentaries and feature films on Internet-connected screen. The Company has three operating segments: Domestic streaming, International streaming and Domestic DVD. The Domestic and International streaming segments derive revenues from monthly membership fees for services consisting of streaming content. The Domestic DVD segment derives revenues from monthly membership fees for services consisting of DVD-by-mail. Its members can play, pause and resume watching, all without commercials or commitments. Additionally, in the United States, its members can receive DVDs to their homes. The Company offers streaming service both domestically and internationally.
  • Regeneron Pharmaceuticals Inc [stckqut]REGN[/stckqut]
    • Regeneron Pharmaceuticals, Inc. is an integrated biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. The Company commercializes medicines for eye diseases, colorectal cancer, and a rare inflammatory condition and has product candidates under development in other areas, including hypercholesterolemia, oncology, rheumatoid arthritis (RA), asthma and atopic dermatitis. The Company’s marketed products include EYLEA (aflibercept) injection, ZALTRAP (ziv-aflibercept) injection for intravenous infusion and ARCALYST (rilonacept) injection for subcutaneous use. The Company has 17 product candidates in clinical development. Its product candidates consist of two trap-based clinical programs and 15 human monoclonal antibody product candidates. The Company has generated each of the antibodies using its VelocImmune technology.
  • Starbucks Corporation [stckqut]SBUX[/stckqut]
    • Starbucks Corporation is the roaster, marketer and retailer of specialty coffee. The Company purchases and roasts coffees that it sells, along with coffee, tea and other beverages, and a range of fresh food items, through Company-operated stores. It also sells a range of coffee and tea products and licenses its trademarks through other channels, such as licensed stores, grocery and national foodservice accounts. It operates through four segment: Americas, which includes the United States, Canada, and Latin America; Europe, Middle East, and Africa (EMEA); China/Asia Pacific (CAP), and Channel Development. In addition to its Starbucks Coffee brand, it also sells goods and services under the brands, including Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange and Ethos. Its Americas, EMEA, and CAP segments include both Company-operated and licensed stores. The Americas and EMEA segments include certain foodservice accounts, primarily in Canada and the United Kingdom.
  • Constellation Brands, Inc. [stckqut]STZ[/stckqut]
    • Constellation Brands, Inc. is an international beverage alcohol company. The Company’s operating segments include Beer, Wine and Spirits and Corporate Operations and Other. The Company’s wine portfolio is complemented by select spirits brands and other select beverage alcohol products. It is a multi-category supplier (beer, wine and spirits) of beverage alcohol in the United States. The Company’s customers include wholesale distributors, retailers, on premise locations and government alcohol beverage control agencies. In the United States, the Company operates 19 wineries using varieties of grapes grown in the Napa, Sonoma, Monterey and San Joaquin regions of California. It also operates eight wineries in Canada, four wineries in New Zealand and five wineries in Italy. The Company’s Canadian whisky requirements are produced and aged at its Canadian distillery in Lethbridge, Alberta.
  • Gentherm Inc [stckqut]THRM[/stckqut]
    • Gentherm Incorporated (Gentherm) is engaged in the design, development and manufacturing of thermal management technologies. The Company’s segments are: Automotive, Industrial. The Automotive segment represents Gentherm’s three geographic operating segments: North America, Europe and Asia. The Automotive segment includes automotive seat comfort systems, specialized automotive cable systems, and other automotive and non-automotive thermal convenience products. The Industrial segment includes Gentherm Global Power Technologies (GPT) and Gentherm’s advanced research and product development division. The advanced research and product development division is engaged in projects to improve the efficiency of thermal management technologies and to develop, market and distribute products based on these new technologies.
  • Thermo Fisher Scientific Inc. [stckqut]TMO[/stckqut]
    • Thermo Fisher Scientific Inc. is a provider of analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. The company operates through four segments: Life Sciences Solutions, provides reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease; Analytical Instruments, provides instruments, consumables, software and services that are used in the laboratory; Specialty Diagnostics, offers diagnostic test kits, reagents, culture media, instruments and associated products, and Laboratory Products and Services, offers self-manufactured and sourced products for the laboratory.
  • Under Armour Inc [stckqut]UA[/stckqut]
    • Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The Company’s moisture-wicking fabrications are engineered in a range of designs and styles for wear in nearly every climate to provide an alternative to traditional products. The Company’s operating segments include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and MapMyFitness. The Company also offers digital fitness platform licenses and subscriptions, along with digital advertising through its MapMyFitness business. Its apparel offers three gearlines, including HEATGEAR, COLDGEAR and ALLSEASONGEAR. Its footwear offerings include football, baseball, lacrosse, softball and soccer cleats, slides and performance training, running, basketball and outdoor footwear. Its accessories primarily include the sale of headwear, bags and gloves.

My typical disclaimer says that I may or may not have a holding of the stocks discussed in this article. This would be a bit misleading for this particular article. You can assume that I am currently invested in every one of these stocks at the time of this writing.

The glass globe image at the top of this article is courtesy of suphakit73 at FreeDigitalPhotos.net

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Company name Ulta Salon, Cosmetics & Fragrance, Inc.
Stock ticker ULTA
Live stock price [stckqut]ULTA[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $231.47
Target stock price (averages with growth) $252.72
Target stock price (averages with no growth) $117.06
Target stock price (manual assumptions) $221.25

The following company description is from Google Finance: http://www.google.com/finance?q=ulta
Ulta Salon, Cosmetics & Fragrance, Inc. (Ulta) is a beauty retailer. The Company provides salon products and salon services in the United States. It offers a combination of more than 20,000 prestige and mass beauty products. As of January 31, 2015, it operated 774 stores in 47 states. The Company offers products in the categories, including cosmetics, which includes products for the face, eyes, cheeks, lips and nails; haircare, which includes shampoos, conditioners, styling products and hair accessories; salon styling tools, which includes hair dryers, curling irons and flat irons; skincare and bath and body, which includes products for the face, hands and body; fragrance; nail polish and nail care products; men’s skincare, haircare and fragrance products; private label, consisting of Ulta branded cosmetics, skincare, bath and body products and haircare, and other health and beauty products.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Ulta Salon, Cosmetics & Fragrance, Inc. as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Ulta Salon, Cosmetics & Fragrance, Inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(access_s2member_level1)]

In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $157.7
  • Growth: 0.18
  • Current EPS (TTM): $4.45
  • P/E: 35
  • Future EPS Calc: $10.18
  • Future Stock Price Calc: $356.31
  • Target stock price: $221.24

[/s2If]
I hope that this makes you a Confident Investor.

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Company name Lululemon Athletica inc.
Stock ticker LULU
Live stock price [stckqut]LULU[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $96.53
Target stock price (averages with growth) $99.86
Target stock price (averages with no growth) $46.54
Target stock price (manual assumptions) $90.63

The following company description is from Google Finance: http://www.google.com/finance?q=lulu

lululemon athletica inc. is a designer and retailer of technical athletic apparel. The Company offers a line of apparel and accessories for women, men and female youth. Its apparel assortment includes items, such as pants, shorts, tops and jackets designed for healthy lifestyle activities and athletic pursuits, such as yoga, running, general fitness and dance-inspired apparel for female youth. The Company conducts its business through two channels: corporate-owned stores and direct to consumer. The Company markets its athletic apparel under the lululemon athletica and ivivva athletica brand names. As of February 1, 2015, the Company’s retail footprint included 211 stores in the United States, 57 stores in Canada, 26 stores in Australia, five in New Zealand, two in the United Kingdom and one in Singapore. The Company’s retail stores are located primarily on street locations, in lifestyle centers and in malls.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Lululemon Athletica inc. as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Lululemon Athletica inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(access_s2member_level1)]

In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $66.51
  • Growth: 0.17
  • Current EPS (TTM): $1.87
  • P/E: 35.6
  • Future EPS Calc: $4.09
  • Future Stock Price Calc: $145.95
  • Target stock price: $90.62

[/s2If]
I hope that this makes you a Confident Investor.

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ID-100237544There are always 15 favorite investments as part of my Watch List that I think are likely to do the best for the next three months.

If you read my book, The Confident Investor, or if you spend much time reading my writing here, you should know that any given company could get “hot” and need our investment experience. Even these 15 favorite investments are not guaranteed to be the best investments in the quarter. However, if you don’t want to watch your investment portfolio three times a week, these favorite investments should combine effectively to beat the market.

The philosophy of this list of favorite investments is that past success is the best indicator of future success. I base My entire Watch List on this philosophy, but even that list is likely too large. This list of favorite investments is the short-term “best of the best” list. However, it is not logical that these favorite investments will be top performers for years, so I simply refresh the analysis every quarter. The logical investment advice is to rebalance your portfolio on this quarterly schedule.

If you are a registered owner of my book, The Confident Investor, I will now explain how I arrive at this least. If you are not a registered owner, you will not see the technical explanation but will simply skip straight to the final list. For non-owners of my book, I am including my favorite investments but you are not going to see how I actually come up with the list or how I prioritize the list. If you want to understand this better, you can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.

[s2If current_user_can(access_s2member_level1)]To compile this favorite investments list, I look at every company in my Watch List. These are companies that I know are extremely well-run. I take the closing value for the first day of this month and then the closing value of that same day one year ago, two years ago, and three years ago. I then calculate the growth each year individually. Finally, I come up with three different metrics:

  • The growth of the stock in the last year.
  • The average of the growths in each year.
  • The weighted average of each year’s growth. The average is calculated by multiplying the past year by 50%, multiplying the second year’s growth by 30%, and the third year back by 20%. These are then added together to do a weighted average that has more influence of the most recent year than the previous years.

I then sort each metric. I find the top 20 performing investments in each metric. Any stock that is in the top 20 performing of each metric receives one vote. Occasionally, I will find 15 or more companies that are in the top 20 of each metric. If that is the case, I rank the list by the weighted-growth metric and select the top 15. If there are fewer than 15 companies in the top 20 of each metric, I choose all of the stocks that exist in each (perhaps 12 of them), and then take the top 3 stocks that are in the top 20 weighted average as well as the top 20 last year’s growth.[/s2If]

My favorite investments for Q2 2015

For Q2 of 2015, my favorite investments are following. These favorite investments are in order of priority with Skyworks being my most confident investment.

  1. SWKS – Skyworks Solutions, Inc. (Skyworks) is engaged in the production of analog semiconductors. The Company supports automotive, broadband, cellular infrastructure, energy management, Global Positioning System (GPS), industrial, medical, military, wireless networking, smartphone and tablet applications. The Company’s portfolio consists of amplifiers, attenuators, battery chargers, circulators, DC/DC (direct current/direct current) converters, demodulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure radio frequency subsystems, isolators, LED (light emitting diodes) drivers, mixers, modulators, optocouplers, optoisolators, phase shifters, PLLs (Phase Locked Loops)/synthesizers/VCOs (voltage controlled oscillator, power dividers/combiners, power management devices, receivers, switches, technical ceramics and voltage regulators.
  2. ABMD – ABIOMED, Inc. is a provider of mechanical circulatory support devices and offers a continuum of care to heart failure patients. The Company develops, manufacture and market products that are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s products are used in the cardiac catheterization lab (cath lab) by interventional cardiologists and in the heart surgery suite by heart surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures. The Impella 2.5 is introduced with normal interventional cardiology procedures and can pump up to 2.5 liters of blood per minute. The Company is conducting USpella, the United States multicenter observational registry collecting clinical data and outcomes for general use patients supported with Impella 2.5, CP and 5.0 during procedures.
  3. MEI – Methode Electronics, Inc. is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies. The Company operates through four segments: Automotive, Interconnect, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers. The Interconnect segment provides copper and fiber-optic interconnect and interface solutions for the aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunications markets. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, high-current low voltage flexible power cabling systems and powder coated bus bars.
  4. STZ – Constellation Brands, Inc. is a leading international beverage alcohol company, with operations in United States, Canada and New Zealand. The Company’s wine portfolio is complemented by select premium spirits brands and other select beverage alcohol products. The Company has three business segments: beer; wine and spirits; and, corporate operations and others. In the United States, the Company operates 18 wineries using many varieties of grapes grown principally in the Napa, Sonoma, Monterey and San Joaquin regions of California. It also operates nine wineries in Canada, four wineries in New Zealand and five wineries in Italy. The Company’s Canadian whisky requirements are produced and aged at its Canadian distillery in Lethbridge, Alberta.
  5. THRM – Gentherm Inc (Gentherm), doing business as Gentherm Incorporated, is engaged in the design, development and manufacturing of thermal management technologies for a range of heating and cooling and temperature control applications. Its automotive products include actively heated and cooled seat systems and cup holders, heated and ventilated seat systems, thermal storage bins, heated seat and steering wheel systems, cable systems and other electronic devices. The Company operates through three segments: Automotive, which includes the aggregated operating results from Gentherm’s three geographic operating segments: North America, Europe and Asia; Industrial, which includes the combined operating results of Gentherm Global Power Technologies (GPT) and Gentherm’s advanced research and development division; and reconciling Items, which include corporate selling, general and administrative costs and acquisition transaction costs.
  6. MNST – Monster Beverage Corporation is a holding company. The Company develop, market, sell and distribute alternative beverage category beverages under the brand names of Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, X-Presso Monster, Muscle Monster, Punch Monster, Hansen’s, Hansen’s Natural Cane Soda, Junior Juice, Blue Sky, Hubert’s, Worx Energy and Peace Tea. The company has two segments, Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers.
  7. UA – Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The brand’s moisture-wicking fabrications are engineered in many designs and styles for wear in nearly every climate to provide a performance alternative to traditional products. The Company’s primary business operates in four geographic segments: North America, comprising the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia and Latin America. Each of these geographic segments operates predominantly in one industry: the design, development, marketing and distribution of performance apparel, footwear and accessories. Beginning December 2013, the Company also operates its acquired MapMyFitness business as a separate segment.
  8. REGN – Regeneron Pharmaceuticals, Inc. (Regeneron) is a biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. Regeneron develops new product candidate using VelociSuite technology platforms. Regeneron’s discovery platforms are designed to identify specific proteins of therapeutic interest for a particular disease or cell type and validate these targets through high-throughput production of genetically modified mice using the Company’s VelociGene technology to understand the role of these proteins in normal physiology, as well as in models of disease. The Company also has human monoclonal antibody technology, VelocImmune and cell line expression technology VelociMab. Regeneron’s antibody product candidates in clinical trials were developed using VelocImmune. The Company has three marketed products: EYLEA, ZALTRAP and ARCALYST.
  9. JAH – Jarden Corporation is a global consumer products company. The Company has diverse portfolio of products, over 120 iconic brands and present across the world. The Company operates in three primary business segments, allowing it to enhance the lives of consumers in countless aspects of everyday life. From Branded Consumables such as First Alert, First Essentials, Lehigh, Loew Cornell, Pine Mountain, and Quickie, to Consumer Solutions such as Bionaire, Crock-Pot, FoodSaver, Health o meter, Holmes, Mr. Coffee, and Oster, its products can be found in homes and businesses across the world. The Company offers globally recognized Outdoor Solutions such as Abu Garcia, Aero, Berkley, Coleman, Fenwick, K2, Marmot, Mitchell, Penn, Rawlings, Yankee Candle, and Zoot, among many others.
  10. MCK – McKesson Corporation delivers pharmaceuticals, medical supplies and healthcare information technology. The Company operates in two segments. The McKesson Distribution Solutions segment distributes ethical and drugs and equipment and health and beauty care products throughout North America and internationally. This segment provides pharmaceutical solutions for biotech and pharmaceutical manufacturers, and practice management, technology, clinical support and business solutions to oncology and other specialty practices operating in the community setting. The McKesson Technology Solutions segment includes McKesson Health Solutions, which includes the Company’s InterQual clinical criteria solution, claims payment solutions and network performance tools. This segment delivers enterprise-wide clinical, patient care, financial, supply chain, strategic management software solutions, as well as connectivity, outsourcing and other services.
  11. EXR – Extra Space Storage Inc., is a fully integrated, self-administered and self-managed real estate investment trust. The Company owns, operates, manages, acquires, develops and redevelops professionally managed self-storage facilities. It operates through three segments, namely rental operations; tenant reinsurance; and property management, acquisition and development. As of December 31, 2013, it held ownership interests in 779 operating properties. Of these operating properties, 506 are wholly-owned, and 273 are owned in joint venture partnerships. An additional 250 operating properties are owned by third parties and operated by the company. These operating properties are located in 35 states, Washington, D.C. and Puerto Rico and contain approximately 75.7 million square feet of net rentable space in approximately 680,000 units and currently serve a customer base of approximately 600,000 tenants. All of the Company’s businesses are conducted through Extra Space Storage LP.
  12. YHOO – Yahoo! Inc. is a technology company and through its technology and insights, delivers digital content and experiences, across devices and globally. The Company provides online properties and services (Yahoo! Properties) to users, as well as a distribution network of third-party entities (Affiliates). These Affiliates integrate its advertising offerings into their Websites or other offerings. Its products include: Search, Communications, Digital Magazines, Video, Flickr, and Tumblr. Search includes Yahoo Search and Yahoo Answers, which enables the users to navigate the Internet, discover information, seek, and share knowledge. Communications includes Yahoo Mail, Yahoo Messenger and Yahoo Groups. Digital Magazines includes Yahoo.com, My Yahoo and Yahoo Weather, among others. Video includes Yahoo Screen and Yahoo Smart TV. Flickr offers Web and mobile photo management and sharing service. Tumblr offers a Web service and mobile application.
  13. ZBRA – Zebra Technologies Corporation (Zebra) offers enterprise asset intelligence products and services. The Company’s products and services allow customers to manage their assets, transactions and people of their organization. The Company designs, manufactures and sells a range of products, including enterprise mobile computers; advanced data capture devices, such as laser, two-dimensional (2D) and radio frequency identification (RFID) scanners and readers; wireless local area network (WLAN) products; printers for barcode labeling and personal identification; real-time location systems; related supplies, such as self-adhesive labels, and utilities, frameworks and application software. The Company operates in two segments: Enterprise, which consists of its mobile computing, data capture and WLAN products, and Legacy Zebra, which consists of barcode and card printing, location, and motion sensing and supplies products.
  14. AAPL – Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company distributes its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp.
  15. ULTA – Ulta Salon, Cosmetics & Fragrance, Inc. is a beauty retailer, which provides one-stop shopping for prestige, mass and salon products and salon services. The Company offers branded and private label beauty products in cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools. The Company offers a combination of over approximately 20,000 prestige and mass beauty products organized by category in a bright, open store environment. The beauty products are arranged in self-service displays and full-service boutiques. The Company also offers a full-service salon and a range of salon haircare products. Each salon is a full-service salon offering haircuts, hair coloring and permanent texture, with most salons also providing facials and waxing.

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Company name ANSYS, Inc.
Stock ticker ANSS
Live stock price [stckqut]ANSS[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Fair
EPS growth Fair
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $86.01
Target stock price (averages with growth) $76.33
Target stock price (averages with no growth) $41.77
Target stock price (manual assumptions) $159.07

The following company description is from Google Finance: http://www.google.com/finance?q=anss

ANSYS, Inc. (ANSYS) develops and markets engineering simulation software and services used by engineers, designers, researchers and students across a spectrum of industries and academia. The Company’s product portfolio consists of ANSYS Workbench, Structures, Fluids, Electronics, Systems and Academic. ANSYS Workbench is the framework upon which the Company’s suite of advanced engineering simulation technologies is built. Its structures product suite offers simulation tools for product design and optimization. The Company’s fluids product suite enables modeling of fluid flow and other related physical phenomena. Its electronics product suite provides field simulation software for designing electronic and electromechanical products. The Company delivers system simulation capability that is used for the design of automated products. The Company’s academic product suite provides portfolio of academic products.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in ANSYS, Inc. as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns. I am removing ANSYS from my Watch List.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of ANSYS, Inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $85.58
  • Growth: 0.15
  • Current EPS (TTM): $2.71
  • P/E: 47
  • Future EPS Calc: $5.45
  • Future Stock Price Calc: $256.18
  • Target stock price: $159.07

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I hope that this makes you a Confident Investor.