Steering clear of Citrix Systems Inc., First Solar Inc., Franklin Resources Inc. and Red Hat Inc. would help put U.S. stock investors on the right course for next year, according to JPMorgan Chase & Co.
The pans from JPMorgan’s equity analysts, along with 65 other stocks they said were worth buying, were cited in a report on the U.S. outlook for 2012. The calls were the analysts’ “best ideas,” according to the note, published two days ago.
As the CHART OF THE DAY shows, the performance of the four stocks this year is a study in contrast. First Solar plummeted 67 percent through yesterday, putting the company in line for the year’s biggest loss among shares in the Standard & Poor’s 500 Index. Franklin declined 14 percent, while Citrix dropped 3 percent and Red Hat gained 2.9 percent.
First Solar and other equipment makers are likely to come under pressure next year as governments reduce financial support for alternative energy, JPMorgan’s Christopher Blansett wrote in the report. “As the subsidies go, so does the solar sector,” the San Francisco-based analyst wrote.
Citrix and Red Hat were selected by John DiFucci, a software analyst based in New York. He wrote that Citrix may suffer as many companies avoid desktop virtualization, which lets employees operate personal computers remotely. Red Hat is misunderstood by investors, he added, and pays relatively high sales commissions on license renewals.
Franklin was part of a “relative value” pairing with Invesco Ltd., one of the 65 buys. Kenneth Worthington, another New York-based analyst, wrote that investors may pull money out of Franklin’s Templeton Global Bond mutual fund and other funds that are trailing their peers.