20 top share picks

Stock-picking requires plenty of skill and patience. Most retail investors will also invest in some kind of computer software, or investment tools to help them at some point in their investing career. But the big investment banks have millions to throw at unique in-house high-tech software packages. It's all incredibly useful data which helps brokers advise clients and benefit their own trading teams. Here, we look at which shares one of the Square Mile's biggest firms is backing right now.

Analyst teams at Credit Suisse use their own tools and models to compare the performance and valuations of 20,000 companies globally. Each team identifies its highest conviction 'outperform' and 'underperform' ideas relative to all the companies covered.

The broker has made some big changes since its last review a month ago. It adds 12 new top picks and removes 13. We're interested in the UK-quoted shares, and, here, Intercontinental Hotels, British American Tobacco, and Centrica are promoted to Credit Suisse's "top outperforms" list. UK shares replaced in the top flight include Anglo American, Associated British Foods, SSE and Whitbread.

In all, 20 London-listed shares make it into Credit Suisse's list of 99 top ideas. Here's what they have to say about five of them.

ITV - price target 290p

Credit Suisse sees upside potential for five reasons - upside to ad revenue growth forecasts as the UK economy strengthens further; the enhanced growth potential of Studios; following the increase in Liberty Global's stake to 9.9% from 6.4%, M&A potential is likely to be embedded into the ITV share price going forward; scope for the introduction of retransmission fees in the UK from 2016; and undemanding valuation on an underleveraged balance sheet.

Royal Dutch Shell - price target 2,175p

"In our view, RDS's recently announced transaction for BG Group makes strategic sense and re-positions RDS down the cost curve," says Credit Suisse. "The NewCo, which could eclipse XOM as the largest publicly traded producer over the medium term, will be a much less capital-intensive version of its former self with greater scale and scope around key focus areas and would allow the company to re-prioritise its investments."

Prudential - price target 1,900p

Long-term durability of Asian growth is why Credit Suisse continues to back insurer Prudential. It thinks equity markets will remain buoyant and a reversal of recent declines in bond yields in the US would also be supportive, both for earnings dynamics and perceived risk profile. That could lead to upward revisions to ascribed value. A forward price/earnings (PE) ratio of just 11 is "attractive".

International Airlines Group - price target 750p

British Airways owner IAG has the potential to hit easyJet levels of profitability on the short haul, reckons Credit Suisse. If it does, the airline could more than double operating profit from €1.4 billion in 2014 to €2.98 billion in 2016. Company guidance currently is for profit to "exceed €2.2 billion". "With an annual, sustainable FCF [free cash flow] yield of 7.4% in 2015E-2016E, we think IAG is considerably undervalued."

ARM Holdings - price target 1,300p

Increasing content in mobile and market share gains in newer targeted end markets like enterprise, embedded and automotive could benefit ARM in the future. Credit Suisse estimates that both the top and bottom line can grow at 15%/20% compound annual growth rate (CAGR) over 2014-2017 (in GBP terms). That kind of growth is driven by a big increase in smartphone-linked royalties plus big bucks made in enterprise networking where four out of the five biggest chip suppliers already having licensed ARM's v8 technology.

Top Outperforms (UK-listed)

Media - ITV

Travel & leisure - Carnival and Intercontinental Hotels

General retailing - B&M European Value Retail

Consumer staples - British American Tobacco

Oil & gas - Royal Dutch Shell

Insurance - Aviva and Prudential

Real estate - Great Portland Estates

Specialty finance - London Stock Exchange

Business & professional service - Capita, G4S and Regus

Capital Goods - GKN

Transport - International Airlines Group and easyJet

Building materials -Wolseley

Technology hardware & semiconductors - ARM Holdings

Telecoms - BT

Gas & multi utilities - Centrica

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.