3 Stocks Goldman Sachs Group Inc (GS) LOVES Right Now – AMZN JNPR MYL

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When Goldman Sachs Group Inc (GS) talks about money, people listen. It’s sort of their thing. While analysts are certainly more than fallible, they often offer some good ways to think about where we are in the stock market.

3 Stocks Goldman Sachs Group Inc (GS) LOVES Right Now - AMZN JNPR MYLWith that said, let’s take a look at three stocks Goldman analyst Jessica Binder Graham thinks investors should buy now, and what they currently have going for them. According to Graham, Amazon.com, Inc. (AMZN), Juniper Networks, Inc. (JNPR) and Mylan NV (MYL), are all current buys.

Amazon.com, Inc. (AMZN)

Not only did AMZN stock make the cut on Graham’s list, it’s also currently on Goldman’s conviction buy list, which is even more exclusive territory. Sure, shares are up 58% in the last year, but Amazon still has a ways to go before being fairly valued, says Graham.

To make this pick, the Goldman analyst relied heavily on one ratio: the enterprise value to earnings before interest, taxes, depreciation and amortization ratio. Here, she found that AMZN stock trades for 17.5 times EBITDA, despite a “mid-cycle” median value of 23.9.

Mid-cycle ratios indicate where stocks have typically traded in the middle of an economic recovery.

Goldman Sachs has a $720 price target for AMZN stock, which implies more than 23% upside from current levels. Given the rapid expansion of its high-margin cloud computing business, Amazon Web Services, Amazon is rapidly becoming more consistently profitable than ever. Finally.

Juniper Networks, Inc. (JNPR)

Shares of networking hardware-maker Juniper Networks also made it to Graham’s list. Despite being up roughly 12% in the last year, JNPR has been unable to keep up with the market in 2016, and is down 8.6%, while the S&P 500 is more or less breakeven.

Graham thinks this represents a great time to buy JNPR stock, especially after taking a look at some of its historical ratios. Juniper Networks stock currently trades at a price-to-earnings ratio of just 11.2, far below its mid-cycle median P/E of 17.9. Goldman rates JNPR stock a “Buy” and has a $32 target price on shares, representing an upside of 27% from Tuesday’s close.

Seeing as Juniper shares were trading above $32 in early January, the price target certainly isn’t unobtainable.

Mylan NV (MYL)

Finally, Graham says that shares of large-cap pharmaceutical company Mylan are a good value at today’s prices. Trading at just 9.2 times earnings when its mid-cycle median P/E is 11.4, there’s room for MYL stock to run.

Not surprisingly, Goldman gives MYL stock a “Buy” rating, and thinks shares could get to $60 a pop. At Monday’s closing price, that was an upside of 21%, though Mylan shares have more ground to make up after falling some on Tuesday (down 2.8%).

MYL stock has a 52-week high upwards of $76 per share.

Conclusion

Truthfully speaking, analyst opinions are a dime a dozen.

They’re often worth taking into consideration, but should never be the sole motivation for buying or selling a stock. Try to take in a variety of information from different sources, and even if the opinions don’t exactly gel with your own, acknowledge them.

It’s only a willingness to learn, an open mind and perhaps some changes in emotional temperament that can make us better investors.

Maybe AMZN, JNPR or MYL are right for you and your portfolio right now. Perhaps none of them are. But at least one analyst thinks these three are historically undervalued; don’t ignore that data point when you trade these three.

As of this writing, John Divine was long AMZN stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/04/goldman-buy-list-amazon-amzn-juniper-networks-jnpr-mylan-myl/.

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