Deutsche Bank reveals its top stocks to own for the next 12 months

Published Mon, Jul 5 202110:30 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at investment firm Deutsche Bank have picked their "single best" investment ideas to hold over the next 12 months. More than a dozen U.S. stocks have been added to its conviction list, which covers tech, healthcare, banking and more. The stocks make up the bank's latest "DB Fresh Money List," a quarterly report which sees its U.S. analysts name their top investments for the next year. In the report published Friday, the bank said the list's rolling 12-month performance is up over 48%, compared to the S & P 500's 36% rise. Here are some of its new stock picks for the next 12 months: Technology Dell is one of the new tech stocks that have been added to Deutsche Bank's list. It is trading at a "multi-turn discount" to peers, according to the bank, after adjusting for its ownership of cloud computing arm VMware which is due to be spun off. As people head back to offices after working from home during the pandemic, demand for the company's desktop computers has improved and this "bodes well" for the rest of the year, the analysts wrote. Cybersecurity firm Palo Alto Networks is also a pick for the bank, which described it as "best-in-class security firm with a cash-cow firewall business, that will prove stickier than many expect, and healthy momentum in its Next-Gen products." Healthcare Medical tech company Stryker is "well-positioned for sustainable growth" above its weighted average market growth rate (WAMGR), according to Deutsche Bank, which praised its "smart organic investments" and "significant but disciplined business development activity." The bank also expects its orthopedic and spine business to take more market share. Consumer Food company Mondelez has been added to Deutsche Bank's list, with the bank expecting "sustained outperformance" due to its global brands and "local jewels." It also likes its "compelling" current valuation and "credible upside" for earnings into next year. People are ready to invest in vacation timeshares as Covid-19 restrictions get lifted, and this is set to benefit Marriott Vacations Worldwide , according to Deutsche Bank. The "historically robust American consumer" is ready to travel and the "wealth effect" created since the pandemic started is set to grow the market for shared-ownership vacation homes, the analysts wrote. Sportswear brand Under Armour is in the middle of a turnaround and is a pick for the bank, which said it is likely to benefit from "multiple years of resetting the cost base," and expects its North America segment to return to growth. Deutsche Bank said its earnings before interest and taxes (EBIT) margins were likely to be "impressive" in the long term. Financials Capital One offers "a solid return and superior relative upside vs peers," according to Deutsche Bank. "This strength is driven by a continued pristine credit environment, elevated demand in the used auto market, and stronger consumer confidence," its analysts wrote, referring to the company's auto loans business. Wells Fargo is also a pick for the bank, which said it has "the most leverage" to benefit from a growth in loans and rising interest rates, "both key themes likely to drive bank stocks over the next 6-9 months." Reinsurance company Everest Re Group , which also makes Deutsche Bank's list, held its first investor day last month. "Our primary takeaway is that extensive changes in the operational strategy should drive meaningful improvements in the underwriting performance of the business," the analysts wrote. "Investor expectations for Everest earnings profile continue to be too conservative," they added.

Traders work the floor of the New York Stock Exchange.

NYSE