Morgan Joseph's 'Stellar Six' Stocks Picks
Morgan Joseph's research department released the third edition of their annual "Stellar Six Stock Picks" on Wednesday. David Kestenbaum, managing director at the firm, shared his insights on some of this year's picks with CNBC.
Morgan Joseph's 2009 Stellar Six greatly outperformed the S&P Index, most notably IMAX, up 112 percent for the year.
Many of the 2010 selections have fared particularly well within their respective industries.
And as the economy continues on its path of recovery and the government increases program spending, Morgan Joseph analysts anticipate these six names to benefit.
The Stellar Six List:
- Cree with $100.00 price target
- Great Lakes Dredge & Dock with $7.00 price target — This dredging company plays in an industrial sector with very high barriers to entry and holds 45 percent of the U.S. market share.
"It has a hiccup in the first quarter based on weather," Kestenbaum said. "So we see an buy opportunitity here."
- LodgeNet Interactive with $8.50 price target — Despite being dependant on the hotel industry that struggled through the recession, this media services provider managed to generate $65 million in free cash flow.
"It did well in the difficult hotel environment," Kestenbaum said. "With the free cash flow and paying down their debt, their equity will rise."
- Mattel with $28.00 price target
- Spectrum Pharmaceuticals with $8.00 price target — This small-cap biotechnology firm is an "incredible story," according to Kestenbaum.
Unlike other small industry players that focus on one drug, Spectrum has four in the pipeline: Two approved and ready to roll out and another two that he sayswill likely be approved early next year.
- Volcano Corporation with $26.00 price target
CNBC Data Pages:
____________________________________________________________ Disclosures:Research analyst compensation is dependent, in part, upon investment banking revenues received by Morgan Joseph. Morgan Joseph intends to seek or expects to receive compensation for investment banking services from subject companies within the next three months. Morgan Joseph has managed or co-managed a public offering of securities for Great Lakes Dredge & Dock Corporation within the past 12 months. Morgan Joseph has received compensation for investment banking services from Spectrum Pharmaceuticals within the past 12 months. Morgan Joseph makes a market in the shares of GLDD. Morgan Joseph makes a market in the shares of SPPI. Disclaimer