Will this bull-run ever end? “Since we are back close to the highs for the S&P 500, risks of a pullback have certainly risen,” Wall Street veteran Bill Stone told CNBC recently.
But which stocks should be at the top of your pullback wish-list? Here I used TipRanks to source 10 of the hottest stocks out there. These are stocks that I am very confident have a promising long-term outlook — but right now seem a bit pricey.
Plus by turning to the Street, we can see what some of the best-performing analysts are predicting for these stocks. Let’s take a closer look now:
Top Stocks To Buy on a Pullback: Twilio (TWLO)
Cloud communications platform Twilio (NYSE:TWLO) allows developers to build SMS, Voice & Messaging applications. This basically means it gives developers the building blocks for interaction.
The company has just reported yet another impressive quarter with robust metrics across the board. It also increased full-year guidance for the second straight quarter.
However, success comes at a price — a high one. Even though this stock holds a ‘Strong Buy’ Street consensus, the average price target suggests only marginal upside from current levels (3%).
That’s why I would recommend waiting before jumping in here. But ultimately the outlook for the stock is very bullish.
“As higher-margin products grow in the mix, overall margins should gradually expand as well, negating a key near-term bear argument” writes five-star Oppenheimer analyst Ittai Kidron.
He concludes: “We see further upside as this part of the story is not reflected in consensus estimates and maintain our bullish view on the upside potential to 2019.” See what other Top Analysts are saying about TWLO.
Top Stocks To Buy on a Pullback: Home Depot (HD)
Home Depot, Inc. (NYSE:HD) is the U.S.’s largest home improvement retailer with over 2,200 retail stores.
“For some time now, we have highlighted home improvement as a bright spot within the retail sector and HD as the clear best run operator within the space” cheers five-star Oppenheimer analyst Brian Nagel.
He believes HD can surprise investors with solid and persistent comp and EPS upside. Nagel has a Buy rating on the stock with a $220 price target.
The only dark spot: the price. Right now, the stock has 7 buy ratings and 3 hold ratings from analysts. One of these hold ratings comes from Loop Capital’s Laura Champine.
She notes management’s “continued confidence that cyclical trends favor home improvement spending” and that store improvements are lifting sales.
However, for Champine, the stock’s valuation appears “justifiably rich” at these levels. That’s why I would just add this stock to the wish-list for now. See what other Top Analysts are saying about HD.
Top Stocks To Buy on a Pullback: Dropbox (DBX)
Dropbox has just posted very impressive Q2 earning results. However, shares fell on COO resignation news, lack of material Operating Income raise, and very high recent expectations. On a one-month basis shares are now down 10%.
Don’t be deceived. This is a top stock to own — and a worthy purchase in this pullback or any other.
As Mahaney writes “We believe high expectations/multiples are warranted. Hence the upgrade…. We continue to view Dropbox as addressing a large TAM and view it as one of the clear market leaders.”
Indeed, this ‘Strong Buy’ stock has 100% Street support. It has received only Buy ratings from the Street in the last three months. See what other Top Analysts are saying about DBX.
Top Stocks To Buy on a Pullback: ANGI Homeservices (ANGI)
ANGI Homeservices Inc. (NASDAQ:ANGI) stock has put on a stunning run recently. Year-to-date shares are up almost 88%. But even with this rally, analysts still rate the stock a ‘Buy.’
However, the average analyst price target now indicates a downside from the current share price. Understandably, this makes me cautious.
“We believe ANGI HomeServices Inc. which now operates the two leading home service professional advertising platforms, is extremely well positioned to take advantage of the secular offline to online shift in advertising” states Oppenheimer’s Jason Helfstein.
He sees a ‘bullish setup for 2019’ with Q4 revenue growth of 20% rising to 24% in 2019.
Overall ANGI has received 5 back-to-back buy ratings in the last three months. The conclusion: keep a close eye on how this stock moves through 2018 and take advantage of any weakness. See what other Top Analysts are saying about ANGI.
Top Stocks To Buy on a Pullback: Tableau (DATA)
Tableau Software (NYSE:DATA) can help anyone see and understand their data. It produces interactive data visualization products focused on business intelligence.
The stock smashed Q2 earnings. Sales/earnings easily beat expectations on across-the-board strength (commercial, enterprise, and regional). Subscription momentum is now up by a whopping 181% y/y.
Post-earnings, top Oppenheimer analyst Ittai Kidron gave this upbeat analysis: “We remain positive on Tableau’s positioning and the value of its analytics platform as recent results suggest healthy new customer net adds and a strongly engaged existing customer base.”
But hold your horses for now. “While positive long term, we hold to our Perform rating to reflect the near-term uncertainty.”
“We’d still look for a better entry point” concludes Kidron. Overall, the stock has a cautiously optimistic Moderate Buy rating from the Street. See what other Top Analysts are saying about DATA.
Top Stocks To Buy on a Pullback: Amazon (AMZN)
There is no denying that Amazon.com, Inc. (NASDAQ:AMZN) is a pricy stock. Right now it is trading at almost $1,900. That means even a small pullback in terms of price can mean a big saving in terms of dollars.
And there is a reason why AMZN stock is up over 60% year-to-date. The company is crushing it. Plus there is still huge growth opportunity ahead.
“Based on our estimates, Amazon is currently pursuing 8 of 10 market opportunities that exceed $1T, globally. We see an opportunity for it to exploit the remaining two — gas (stations) and travel,” says top D.A. Davidson analyst Tom Forte.
He notes that the “company has a history of solving complex logistical problems. Financially, it seeks opportunities that can generate significant free cash flow.”
Meanwhile Piper Jaffray’s Micheal Olson expects ad revenue to be a major driver of company revenue. “By 2020, we expect Amazon ad revenue of $16 billion and by 2021, beyond the scope of our current model, we believe it is highly likely that profits contributed from advertising will exceed those from ASW,” Olson told investors on August 13. He has a $2,100 AMZN price target.
Amazon is still one of the Street’s best-rated stocks. It has a ‘Strong Buy’ consensus with 35 recent Buy ratings vs only 2 Hold ratings. See what other Top Analysts are saying about AMZN.
Top Stocks To Buy on a Pullback: Splunk (SPLK)
Honestly, big data analyzer Splunk (NASDAQ:SPLK) is a stock I would buy now. Prices are already down 10% on a three-month basis. And any further pullback would make this company even more appealing.
Right now SPLK has a best-performing analyst consensus of Strong Buy. This comes with an average analyst price target of $126 — already suggesting upside potential of over 20%.
“We believe SPLK is executing effectively into a favorable environment and is well positioned to garner the lion’s share of its massive $62B TAM” writes Oppenheimer’s Shaul Eyal. In other words, the company is still in the early stages of its growth story.
And momentum is building rapidly. For example, for FY18, the company closed ten mega orders ($10M+) compared to only six such deals in 2012-2017.
‘The best is yet to come’ sums up this Top 100 analyst. He has a $130 price target on the stock (24% upside potential). See what other Top Analysts are saying about SPLK.
Top Stocks To Buy on a Pullback: Domino’s Pizza (DPZ)
Pizza chain Domino’s Pizza Inc (NYSE:DPZ) is already up by a whopping 52% year-to-date. This makes the stock pretty pricey, but it doesn’t change the fact that this is one of the leading U.S. pizza delivery chains. And who doesn’t like pizza?
“We remain attracted to DPZ’s industry-leading system sales growth algorithm and are buyers on dips” writes Oppenheimer’s Brian Bittner.
“Looking forward, we expect catalysts for share gains to continue to drive at least mid-singles comps, and our case analysis through 2020 suggests this will play out well for the shares.”
He upgraded the stock back in January and explains why here: “DPZ has unique tools to gain share and sustain best-in-class SSS [same store sales], unit expansion and operating profit growth.”
Indeed, the company has a long-term +3-6% SSS target, and so far this is looking very achievable. See what other Top Analysts are saying about DPZ.
Top Stocks To Buy on a Pullback: Costco (COST)
Year-to-date strength means Costco Wholesale Corp’s (NASDAQ:COST) current upside potential appears limited. This is the reason why Gordon Haskett analyst Charles Grom has just downgraded Costco to Accumulate from Buy.
However, the fact remains that Costco still boasts 100% Street support. Ten analysts have published COST Buy ratings in the last three months. And crucially, they are bullish on Costco’s strategy and best-in-class fundamentals. These are positives that aren’t going away anytime soon.
RBC Capital’s Scott Ciccarelli explains why he is such a fan of the stock here:
“With what we view as a significant competitive advantage (buying better and working on lower mark-up than almost any other company) and HSD [high single-digit]/LDD [low double-digit] EPS growth, we continue to believe that COST provides investors with scarcity value that simply can’t be found in many other places in the market.”
He has a $246 price target on the stock (11% upside potential). See what other Top Analysts are saying about COST.
Top Stocks To Buy on a Pullback: Trinity Industries (TRN)
Rail transport company Trinity Industries, Inc. (NYSE:TRN) is an intriguing stock pick right now.
On August 7, Cowen & Co’s Matt Elkott singled out TRN as a stock to watch. “We expect volatility in rail equipment stocks following strong runs leading up to and throughout earnings.”
And he views any pullbacks as unique buying opportunities in TRN.
“We see strong locomotive and railcar demand continuing, as a likely early/ elongated peak begins, potential weather threats loom, and leasing pioneer GATX’s orders signal now is the time for equipment purchases.”
GATX is widely seen as one of the best navigators of the railcar cycle. This means its orders could be viewed by other lessors as a sign that this is the time to invest in new equipment.
As a result, Elkott concludes: “We see upside to the company’s implied 2H18 rail margin guidance.” He has a $46 price target on TRN (26% upside potential). See what other Top Analysts are saying about TRN.
TipRanks.com offers exclusive insights for investors by focusing on the moves of experts: Analysts, Insiders, Bloggers, Hedge Fund Managers and more. See what the experts are saying about your stocks now at TipRanks.com. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.