Morgan Stanley is out with its top stock picks for 2015, shedding the short-term predictions and going long in 50 securities it believes will continue to post strong EPS growth.
Instead of looking for undervalued equities, analysts across Morgan's global research team chose companies with compelling competitive advantages that differentiated them from the pack.
"The main criterion is sustainability — of competitive advantages, business model, pricing power, cost efficiency and growth," the bank wrote.
Amazon.com
Ticker: AMZN.O
Sector: Online Consumer Discretionary
EPS Growth (5-Yr CAGR): 26%
"Over the next 5 years, we are looking for 30% annualized sales growth. We have high conviction that Amazon.com can maintain growth at this level by increasing the number of its Amazon Prime accounts."
Source: Morgan Stanley
Anheuser-Busch InBev
Ticker: ABI.BR
Sector: Beverages
EPS Growth (5-Yr CAGR): 14%
"Despite industry-leading EBITDA margins (just under 40%), we expect operating profit growth to exceed sales growth and for margins to therefore expand further, albeit at a more modest pace than in the period immediately after the Anheuser Busch acquisition as M&A synergies are now largely realised."
Source: Morgan Stanley
AmBev
Ticker: ABV.N
Sector: Beverages
EPS Growth (5-Yr CAGR): 13%
"AmBev currently has close to 70% market share of Brazil’s beer business, with dominant brands and world-class marketplace execution. ABV has the three leading beer brands in Brazil – Skol, Brahma, and Antarctica – as well as the leading premium portfolio (Stella, Bud, and two ABV brands) that is starting to grow rapidly, off a small base."
Source: Morgan Stanley
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