As the market toys with whether it wants to end its bull run or keep it going, and as trade war fears and inflation jitters play with volatility, Morgan Stanley has released its ultimate equity list of 10 stocks it thinks will outperform.
But they’re not all meant to hold on to for long …
Here’s Morgan Stanley’s Top 10 picks of stocks that still may have room to grow:
#1 Microsoft (NYSE:MSFT)
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Microsoft made the list because Morgan Stanley sees accelerating revenue growth, improving margins and capital returns that will drive higher total returns over the next three years.
#2 Cisco Systems Inc (NYSE:CSCO)
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Cisco pulled rank thanks to the massive problem we’re having with data breaches. According to Morgan Stanley, this company is the “best positioned” to lower costs associated with companies dealing with security breaches.
#3 Walt Disney Co. (NYSE:DIS)
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Massive video consumption and streaming are expected to push Disney’s Pixar, Marvel and Star Wars franchises higher, says Morgan Stanley, which also expects additional revenue growth from parks and film. Even better, it’s trading at a discount right now.
#4 T-Mobile US Inc (NYSE:TMUS)
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Improved free cash flow and capital return to shareholders secured T-Mobile’s place on the list. It’s also pulling out all the stops in the 5G race with its key rivals.
#5 NextEra Energy Inc (NYSE:NEE)
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For NEE, Morgan Stanley’s eyeing the utility’s renewable unit for heavy earnings and dividend growth through 2020.
#6 E*Trade (NYSE:ETFC)
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E*Trade earnings are expected to rise along with improving net interest margins. Daily average revenue trades (DARTS) are steadily rising, coming in at a 5-percent increase last month. Related: Bitcoin Is Winning Over Housing Market
#7 Knight-Swift Transportation Holdings Inc. (NYSE:KNX)
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KNX has gotten a significant boost in confidence from institutional investors of late.
#8 Iqvia Holdings Inc. (NYSE:IQV)
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Institutional investors are moving a lot around this medical research company. Most recently, Allianz Asset Management acquired another $7.3-million position in IQV.
#9 LyondellBasell Industries N.V. (NYSE:LYB)
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This materials company is getting a lot of attention lately, not least because of a clear catalyst: It just completed a deal with SUEZ for a 50/50 partnership in the Netherlands-based Quality Circular Polymers, a key plastics recycling company. It is said to be the first time a major player I the chemicals and plastics industry has partner with a leading resource management company. This is the possibly the beginning of a much bigger consolidation of the plastics value chain.
#10 Continental Resources Inc (NYSE:CLR)
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Even an oil and gas company made it on the list. Overall, the stock looks set to rebound from a downturn, and it’s holding major positions in key US shale plays in North Dakota’s Bakken/Three Forks and Oklahoma’s liquids-rich SCOOP/STACK region.
CLR’s consensus rating has improved over the past month, with analysts setting a 12-month price target of $61.71 per share, which would mean it’s trading at a discount right now.
By David Craggen for Safehaven.com
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