Each month, Credit Suisse’s small-cap strategists ask the firm’s analyst to name their favorite small- and mid-cap stocks. This month, six new stocks made the list: RPM International (RPM), SunCoke Energy (SXC), Zions Bancorp (ZION), Signature Bank (SBNY), Edwards Lifesciences (EW) and Rexnord (RXN).
Credit Suisse analyst Matthew Clark explains why he’s bullish on Signature Bank…
Top-tier growth story with only 1% share of a $1.2 trillion metro NY market. New team hires continue to support strong growth prospects that the market continues to underestimate.
…while analyst Nathan Littlewood explains why he likes SunCoke Energy:
We like [SunCoke Energy] due to its growth optionality and believe this business model is well positioned to benefit from the steel industry’s over-leveraged balance sheet, lack of profitability, and historically low asset valuations. [SunCoke Energy] brings to the table a low cost of capital and proven business model. We estimate that [SunCoke Energy] has business development opportunities across various industries (including coke making, coal handling and ferrous) which could be worth as much as 3-4x in annual EBITDA as the company's current asset base. [SunCoke Energy] has very low commodity price exposure relative to steel mills and coal miners. [SunCoke Energy] also maintains a 55.9% common unit interest and a GP interest in [SunCoke Energy Partners (SXCP)] (the MLP) which allows [SunCoke Energy] to benefit disproportionately from the MLP's growth given their incentive distribution rights.
Shares of Signature Bank have gained 2.3% to $128.48 at 2:28 p.m. today, while SunCoke Energy has risen 1.5% to $23.18, RPM International has advanced 0.6% to $42.09, Zions Bancorp has gone up 0.7% to $31.19, Rexnord has gained 0.5% to $29.12 and Edwards Lifesciences has dropped 0.3% to $73.95.
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