Wall Road's prime analysts are betting on shares like Qualcomm & Humana
2011 profit: $ 32.87 (60%) 2011 closing price: $ 87.61 last year, investors turned away from such HMO stocks fearing the impact of a new healthcare overhaul rule that includes medical loss ratios. However, Humana showed it was able to manage the new regulation and delivered better than expected profits and a better than expected forecast for 2012 in October. Stephen Weiss, Partner at Short Hills Capital: "Eight times the profit, you" I own a stock that is still cheap and very, very defensive
As it now becomes clear that Joe Biden will take over the White House, investors are betting that Congress will split and President Trump's corporate tax policy will remain unchanged.
"Until about last week the consensus belief was a full blast of blue – now changing that the market is re-evaluating … a status quo Senate could ease the regulatory burden on the technology sector." Anna Han, a stock strategist at Wells Fargo Securities, commented.
However, with many factors remaining uncertain, it's not easy to find stocks that are designed to outperform the broader market.
One approach is to look at recent stock picks from analysts who are consistently getting it right. TipRanks' analyst forecasting service seeks to identify the top performing analysts on Wall Street or the analysts with the highest success rate and average return per rating on a yearly basis.
Here are the five most popular stocks of analysts right now:
On November 2, biotech company Provention Bio announced that it had completed its ongoing BLA filing for teplizumab, a therapy that could potentially delay or prevent clinical type 1 diabetes (T1D) in high-risk patients. For Chardan analyst Gbola Amusa, this development confirms its confidence in PRVB, with the company remaining a "top choice for 2020". To do this, he reiterated a Buy recommendation and a target price of $ 35 (169% upside potential) after the news broke.
The FDA has 60 days to review the final submission. If the application is subsequently acceptable for review, a PDUFA target date will be established. It should be noted that the drug was awarded the Breakthrough Therapy Designation (BTD) in 2019, which reduced the review time from 10 months to 6 months.
"We see scope for prevention to meet previous guidelines for a possible US approval of teplizumab for delaying or preventing T1D in people at risk in mid-2021 … Teplizumab is a potential breakthrough with highly significant outcomes in subjects" at risk "for Terminal T1D, "commented Amusa.
Turning to the Phase 2 risk study, the data, although smaller, represent "the first evidence of therapeutic modulation of disease progression in T1D that strongly supports the approach of prevention to the treatment of early-stage autoimmune diseases," Amusa's opinion. In addition, the therapy received praise in an editorial published in the New England Journal of Medicine.
In addition, Amusa estimates that the at risk population is only a blockbuster opportunity in the US. According to information from the JDRF T1 Fund, there are over 300,000 stage 1-2 T1D patients in the US and 2.3 million worldwide. "300,000 US patients for a one-time cost of $ 60,000 for one treatment translates into a total market opportunity of $ 18 billion. An annually changing population of $ 60,000 for each stage means a recurring market opportunity of $ 2.4 billion US dollars a year, "he explained.
Amusa ranks 99th in TipRanks' ranking and currently achieves an average return of 31.8% per rating.
Fabrinet just got a thumbs up from Needham's Alex Henderson. This five-star analyst set a price target of $ 85 (29% upside) and a buy rating for the stock on Nov. 3rd.
In the most recent quarter, the optical communications equipment company significantly exceeded Henderson's revenue and EPS estimates by 4.4% and 7%, respectively, and grew 9.4% and 22.9% year over year, respectively. All of this was achieved despite an uncertain environment, with pressure on spending from Huawei and service providers also reflected. Put simply, Henderson said, "These are good results."
Henderson argues that investors have been waiting for Huawei's impact to fall out of the numbers and now that the "fourth quarter bridge has been crossed, all that remains is the uptrend".
According to Henderson, Cisco is moving a large portion of Systems' products to Fabrinet, which could exceed $ 250 million a year. However, he notes that the numbers reported reflect only a small contribution from the Cisco transition. However, this should actually increase in the first quarter of fiscal 2021 and reach the full execution rate by June, with the first full execution rate expected in the quarter in September.
The analyst went on to say, "We believe the size of this additional business is generally not reflected in prospects and Street estimates. It should add at least $ 50 to 60 million year-over-year to revenue. The Street estimates have CYQ3 Revenue We believe the Fabrinet could hit that number without Cisco. If the rest of FN were flat it would bring in $ 486 million to $ 496 million. That's a lot of upside. "
TipRanks shows that the analyst with the rating # 153 has a success rate of 57% and an average return of 20.4% per rating.
Since joining CFO John Collins, business messaging and communications software company LivePerson has put a significant emphasis on implementing a data-driven approach across all lines of business, and Needham five-star analyst Ryan MacDonald has "increased confidence in the company and improved the improvement." Business development. "
MacDonald took an even more optimistic stance and raised its target price from $ 60 to $ 65 on October 30th. He also repeated a buy recommendation. The new target price provides for an upside potential of 5%.
Based on the third quarter results, MacDonald argues that the data-driven approach appears to be working. The company delivered a "rule of 40 with a combination of 26% sales growth and 18% free cash flow margin". This was LPSN's first quarter of positive free cash flow since the fourth quarter of 2018, which the analyst said highlighted "the company's progress in optimizing costs while enjoying strong revenue growth."
"LPSN firmly believes that the usage increases caused by pandemics are sustainable and indicate a structural change in the market. When we combine this with the operational efficiency benefits that the company is realizing across the company, we remain confident that LPSN will too can continue to do. " Accelerate growth and increase margins, "commented MacDonald.
Some investors expressed concern that new logos have not yet recovered. However, MacDonald believes that "a strong short-term expansion opportunity in the existing base can help accelerate growth as new employees and distributors increase". As a result, he's a current level buyer.
With an 81% success rate at MacDonald and an average return of 40.4% per rating, he is one of TipRanks' top 45 analysts.
On November 4th, Ross Seymore of Deutsche Bank retained a buy rating for Qualcomm after a beat and raise quarter for the semiconductor company. The five-star analyst reflected an additional bullish signal and raised the stock price forecast from $ 127 to $ 150, implying an upside potential of 16%.
In response to the pressure, Qualcomm's shares rose over 11% in after-hours trading. Looking at the details, the company posted fourth quarter revenue of $ 6.5 billion, up 33% from the previous quarter. The analysts expected sales of 5.9 billion US dollars. Non-GAAP earnings per share of $ 1.45 topped the street's call of $ 1.17. Although the gross margin declined 60 basis points quarter over quarter to 58.7%, it exceeded the consensus estimate of 58.1%.
Qualcomm did not disappoint in its forecast for the coming quarter. Management expects revenue between $ 7.8 billion and $ 8.6 billion, an increase of 26.1% quarter over quarter over the median of $ 8.2 billion. This slightly exceeded the consensus estimate of $ 7.1 billion.
According to management, the ramp of 5G networks and phones has driven the strong performance. The Qualcomm CEO said the results included a "partial quarterly effect" from a major US cell phone manufacturer.
Based on that "strong beat / raise", Seymore argues that Qualcomm is the "best way" to play the expansion set set to take place in the 5G handset space next year.
With the analyst's success rate of 82% and an average return of 28% per rating, Seymore is the 24th best performing analyst on Wall Street.
After the strong performance of Humana in the third quarter, Michael Wiederhorn von Oppenheimer continues to see the health insurance as a convincing game in this area. Accordingly, the five-star analyst confirmed a buy rating and a price target of USD 460 on November 3rd (2% upside potential).
Adjusted earnings per share for the third quarter were $ 3.08, well above the consensus estimate of $ 2.80. Additionally, occupancy returned to 95% of its historical baseline by the end of the quarter, with non-coronavirus occupancy expected to remain below normal levels in the fourth quarter.
Although HUM was forecasting an EPS loss of between $ 2.29 and $ 2.54 for the fourth quarter, Wiederhorn believes that this is affecting its investments in the Medicare channel, with this division reflecting a significant market opportunity. Additionally, given the potentially "more favorable reimbursement environment and the maturation of its high-growth membership base", HUM could lead to improved margins.
"Given the attractive growth of the company's Medicare Advantage (MA) business, we believe Humana should bring significant returns to shareholders," said Wiederhorn.
Management also mentioned that the recently released 2.82% MA rate hike proposed for 2022 is likely to "benefit the company similarly to the overall market," adding that 92% of members have 4+ star plans.
With a success rate of 75% and an average return of 21% per rating, Wiederhorn lands in the top 30 on TipRanks' list of top performing analysts.