While he's not the most bullish on the Street, Deutsche Bank's David Bianco believe that 2014 will indeed see some growth.
"The US economy should sustain a long lasting expansionary cycle of moderate growth, which will make it worthwhile to stay constructive on the S&P 500 for the next couple of years absent a sharp climb in PEs, inflation or interest rates," Bianco writes in his 2014 outlook.
"At this time, we assign a 75% chance to the S&P reaching 1850 or higher at 2014 end."
Bianco suggests a "very selective" investment strategy including technology, aerospace, insurance, chemical, and biotechnology stocks.
Here are Deutsche Bank's favorite big cap stocks (market cap great than $10 billion, PE on 2014 EPS greater than 20, 2014 EPS growth greater than 5%, and net debt/market cap less than 30% for the non-financial companies).
Delphi Automotive
Ticker: DLPH
Target Price: $75
Net debt/market cap: 8%
2014 EPS growth: 16%
Shares of Delphi Automotive are up 50% year to date.
Source: Deutsche Bank
General Motors
Ticker: GM
Target Price: $55
Net debt/market cap: 5%
2014 EPS growth: 36%
Automaker General Motors has had a terrific 2013 as the U.S. auto recovery chugs along.
Source: Deutsche Bank
CBS
Ticker: CBS
Target Price: $67
Net debt/market cap: 19%
2014 EPS growth: 17%
Shares of CBS are up about 48% year to date, and Bianco writes that he favors some media stocks in 2014.
Source: Deutsche Bank
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