These battle-tested stocks offer 'offense and defense' in an uncertain market

Published Sat, Jun 4 20227:58 AM EDT

Investor anxiety remains on high alert, but Wall Street analysts urged calm this week naming a slew of stocks that are firing on all cylinders. These companies have just the right traits needed to fight through the market adversity, analysts say. CNBC Pro combed through the top Wall Street research to find stocks that provide some portfolio protection during uncertain times. They include: Monster, Visa , Analog Devices , Vertex Pharmaceuticals and Brigham Minerals. Visa There's a lot to like about the payment company's during periods of uneconomic chaos, according to KBW analyst Sanjay Sakhrani. Visa is one of those stocks and sits on the firm's KBW's select analyst list. The analyst wrote recently that Visa is a "a strong investment opportunity for investors as the company's fundamentals exhibit both offensive and defensive attributes." In his note, Sakhrani said many of Visa's offensive characteristics are likely to lead to further growth as consumer's and businesses further shift to e-commerce. The company should also be a big outfperformer in more of recessionary environment, too, the firm said. "In an economic backdrop that may be choppy over the near term, defensive characteristics include its operating leverage, secular growth, and the stability of non-discretionary spending," he wrote. Sakhrani also sees more post-pandemic tailwinds for Visa. "We also believe that Visa is well positioned to strongly benefit from a rebound in cross-border travel, which should see a stronger resurgence next year," he said. Shares of the company are down just 1.8% this year. Monster This market is "built for a Monster," quipped Wells Fargo analyst Chris Carey in a recent note on the beverage giant. "MNST looks a unique stock in this backdrop—plenty of defensiveness, but also offensive," the firm said. Energy drinks are defensive with the ability to fight through a tough macro economic environment and the firm's checks confirm them as one of the more rapidly growing energy segments. In addition, the stock is offensive in that Carey believes the stock still has some margin growth to recover after a rough 2021. With a long runway for growth, he firm expects it to return to "share gainer" status. Carey also wrote that rising gas prices are largely overblown. "C (onvenience)-store growth has underperformed for MNST since the pandemic (more consumption at-home); but, even as gas prices have risen, C-store underperformance has actually narrowed," he said. Throw in a robust balance sheet and the stock has an attractive entry point. "MNST may be the best positioned name we cover for absolute outperformance, regardless of the macro," Carey said. Monster shares are down 7.5% this year. Vertex Pharmaceuticals The biotech company is mainly know as the maker of cystic fibrosis drugs but this franchise pick stock has so much more to offer, investment firm Jefferies said earlier this week. "We see valuation as attractive, especially in this market, with the stock pricing in just cystic fibrosis and cash, making the pipeline mostly free on a SOTP basis," analyst Michael Yee wrote. Competition is heating up in the biotech space, but the firm believes investors will be richly rewarded as Vertex's other lesser-known products move towards market. "VRTX will now have three pipeline programs in late-stage pivotal development, all with blockbuster potential, as well as a very promising Type 1 diabetes cell therapy program, which could be disruptive in the long term," he said. Yee said the stock is also under-owned, perhaps unfairly, as negative sentiment has weighed on the sector. However, now's time to buy to buy this "offensive and defensive" stock, he added, writing that the stock is jus too compelling to ignore. "We view VRTX as the cleanest large-cap biotech growth story, driven by pipeline strength and a growing, high-margin cystic fibrosis business," the firm said. Share's of the company are up 22.7% this year. Brigham Minerals- KeyBanc, Overweight rating "We think the U.S. mineral space is both an offensive and defensive way to play the energy sector right now given strong balance sheets, no capex requirements, high operating margins, and the ability to generate free cash flow even in a low-price environment. We prefer mineral names with low-cost oil assets that have better capitalized operators on their properties and solid long-term dividend growth prospects." Visa- KBW, Outperform rating "We believe that Visa remains a strong investment opportunity for investors as the company's fundamentals exhibit both offensive and defensive attributes. ... . In an economic backdrop that may be choppy over the near term, defensive characteristics include its operating leverage, secular growth, and the stability of non-discretionary spending. We also believe that Visa is well positioned to strongly benefit from a rebound in cross-border travel, which should see a stronger resurgence next year. Analog Devices- Evercore ISI, Outperform rating "A Name to Own, Offering Both Offense and Defense. ADI posted another strong beat & raise based on "insatiable" and "broad-based" demand across end-markets, regions, applications & products. Demand continues to outpace supply, with growing backlog, robust bookings, low cancellations & lean channel inventories – leading mgmt. to guide for sequential growth over at least the next 2-3 quarters, despite April already marking the 9th consecutive quarter of sequential growth." Vertex Pharmaceuticals- Jefferies, Buy rating "We see valuation as attractive, especially in this market, with the stock pricing in just cystic fibrosis & cash, making the pipeline mostly free on a SOTP basis. ... .View VRTX as the cleanest large-cap biotech growth story, driven by pipeline strength & a growing, high-margin cystic fibrosis business.VRTX should outperform in an offensive or a defensive environment & remains an appealing cash flow/pipeline story. ... .VRTX will now have three pipeline programs in late-stage pivotal development, all with blockbuster potential, as well as a very promising Type 1 diabetes cell therapy program, which could be disruptive in the long term." Monster- Wells Fargo, Overweight rating "Built for a Monster. MNST looks a unique stock in this backdrop—plenty of defensiveness, but also offensive. ... .MNST may be the best positioned name we cover for absolute outperformance, regardless of the macro. ... C-store growth has underperformed for MNST since the pandemic (more consumption at-home); but, even as gas prices have risen, C-store underperformance has actually narrowed. ... .MNST market share has expanded over the last decade, making it the share gainer in the global category.'