Stifel’s Unconventional Stock Picks

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Stifel has made several suggestions lately in terms of recommended buys on the stock market. Blue Apron, Snap, and Six Flags have made the cut. Some of these suggestions, particularly Snap and Six Flags, seem counterintuitive, given the current state of their stocks. However, Stifel’s many years of expertise suggests their advice may very well be worth following.

Stifel Financial, founded in 1890, has showed off its financial prowess for over 100 years. Its subsidiaries include Stifel Nicolaus, a full-service retail and institutional brokerage and investment banking firm; Thomas Weisel Partners, an investment banking firm originally started by Silicon Valley banking legend Thom Weisel (also known for founding Montgomery Services); and Stifel Bank & Trust, a retail and commercial bank.

So while Stifel’s latest stock market suggestions may seem to go against conventional wisdom, they’re being made from a place of solid expertise.

Six Flags Entertainment (SIX)

Though Six Flags Entertainment is down 1% so far this year, Stifel’s Steven Wieczynski and Brad Boyer argue that it’s still a stock worth owning. They acknowledge that the company’s second quarter report could “modestly underperform;” however, they note that this is likely because of seasonal issues that are easily resolved.

“On the whole, we sense investors are using recent data points, notably credit card transaction data, to reach conclusions that, in our view, are wholly unfounded,” they note.

Snap (SNAP)

Similarly, Stifel recommends Snap, despite the fact that shares are trading below their $17 IPO price. The trouble, according to Stifel, is that investors are unclear on the possible growth opportunities.

“In our view, Snap is what investors have long wanted (and many still want) Twitter to be: a thriving communications platform for hundreds of millions of high value consumers…that can drive engagement/monetization in the face of competition from internet behemoths like Google, Facebook, and Amazon,” wrote Stifel analyst Scott Devitt.

According to Devitt, users routinely spend more than 30 minutes a day on Snap and send more than 3 billion snaps a day, indicating high engagement.

Blue Apron (APRN)

Though its shares have fallen 30% month-to-date, Stifel has rated the stock “buy” in their research report, released July 24. Though they face a difficult competitor in Amazon, Blue Apron shares surged 11% this week after several financial experts suggested a positive future for the company. According to Stifel, the threat from Amazon is “perhaps overstated.” They estimate that Blue Apron will reach more than 2.6 million customers by 2021, with the average customer ordering at least 12 times a year. That suggests that getting in on the stock now, when its cost is lower, could lead to extremely positive results in the future.

Time will tell if Stifel’s advice proves fruitful. However, given the analysts’ track record, not to mention the many years of experience in the company, investors are likely to make bank if they take note.

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