I want to highlight stocks that fit the double whammy of 1) a bullish outlook from the Street and 2) serious upside potential left. That’s vital when it comes to raking in the profits. Let me take you through my selection process.
I used TipRanks’ Stock Screener to find these stocks. I set the following filters: a “strong buy” consensus from the best-performing analysts and upside potential in many cased of more than 20% from the current share price to the average analyst price target. Then it’s just a question of sitting back and letting the screener work its magic.
Well, almost. From the filtered stocks, I selected the ones that look the most compelling right now. And then I took a closer look at what the analysts have to say right now.
Let’s dive in to see if these top-notch stocks deserve a place in your portfolio:
Strong Buy Stocks: Turtle Beach (HEAR)
San Diego-based audio tech stock Turtle Beach (NASDAQ:HEAR) is making waves in the gaming world. Its market-leading headsets can be used for everything from Xbox One to tablets.
The company had a banner fourth quarter, but the last few months have been rough. The good part is that these last few weeks have driven the stock down to around $11, which is a great place to be.
“We believe the popularity of Battle Royale video games remains a tailwind for Turtle Beach due to their inherent requirement for team-based communication” said Oppenheimer’s Andrew Uerkwitz.
He believes Turtle Beach has multiple long-term tailwinds, including expansion of online multiplayer games, video game streaming and esports. Moreover, the recent surge in sales allows the company to significantly improve its balance sheet and invest in new products and new markets.
Uerkwitz’s buy rating on the stock comes with a $24 price target (more than a 100% upside potential) and the Street is even more bullish. Want to learn more about Turtle Beach? Get the free HEAR Stock Research Report.
Chinese e-commerce giant Alibaba (NYSE:BABA) looks appealing right now.
Trading at about 6x price-to-sales and about 19x EV/EBITDA on calendar year 2019 estimates with around 30% three-year CAGRs through 2021, even on investment-depressed margins, the fundamental valuation looks attractive.
“Though Macros remain a big unknown, we view BABA’s Fundamental Risk/Reward as very compelling here,” writes RBC’s Mark Mahaney. “Core China Commerce Comps ease into next year, including the Customer Management segment of China Retail that could further improve from recommendation feed changes.”
And in the near-term, investors can gain confidence in the improving profit growth from Alibaba’s core marketplace EBITA.
That’s thanks to continued investment in strategic initiatives (Ele.me, Lazada, New Retail and Cainiao) to improve their TAM and business moats. With a $210 price target, Mahaney is forecasting upside potential of 24%.
Note that BABA has received only “buy” ratings from the Street for the last seven months. Get the BABA Stock Research Report.
Cigna Corp (CI)
Health insurance giant Cigna Corporation (NYSE:CI) has a strong track record of growth in recent years. However it has traditionally traded at a discount to its peers.
At the end of 2018, Cigna received the regulatory approval for buying Express Scripts, the last major standalone pharmacy benefit manager (PBM).
Although there are both positives and negatives from the Express Scripts deal, ultimately it should pay strong long-term returns for shareholders. That’s thanks to a compelling opportunity to cross-sell its services, as well as a more equity-friendly capital structure.
“Overall, Cigna’s traditionally conservative management team continues to project robust growth from the ESRX deal, but we believe the stock still does not reflect the significant upside,” said Oppenheimer’s Michael Wiederhorn. “As a result, we maintain our Outperform rating and would continue to be buyers.”
Indeed his $254 price target indicates shares can surge 64%.
Out of 12 analysts covering the stock, 11 rate CI a buy. Get the CI Stock Research Report.
Marathon Petroleum (MPC)
Ohio-based Marathon Petroleum (NYSE:MPC) is the largest refiner in the U.S., with over 3 million barrels per day of capacity across 16 refineries. On top of that it also has a network of nearly 4,000 company-owned retail stations.
Marathon recently snapped up Andeavor for a whopping $23 billion last year. In Q4 2018, MPC realized $160 million of synergies from the ANDV transaction. And that’s just the beginning. The company reiterated its goal of $600 million of synergies by the end of 2019 and $1.4 billion by the end of 2021.
“In our opinion, Marathon’s retail business, Speedway, is the most attractive retail franchise in our coverage universe, and the extension of the Speedway model to the acquired ANDV stores could provide meaningful upside,” said RBC Capital’s Brad Heffern.
Overall, all four analysts covering the stock are bullish. Their $92 average analyst price target works out nearly a 60% upside from the current share price. Get the MPC Stock Research Report.
Amarin Corp (AMRN)
Year-to-date, Amarin (NASDAQ:AMRN) stock is up 42% due to Pfizer (NYSE:PFE) buyout chatter from earlier in the year. According to rumors, the pharma giant is interested in making a bid for the fish oil drug maker. This would enable Pfizer to get its hands on Amarin’s fish-oil medication Vascepa.
This drug is the first Pure EPA prescription Omega-3 clinically proven to lower very high triglycerides without raising bad cholesterol.
Going forward, can the stock keep up the good times? Or should investors be cautious? Cantor Fitzgerald’s Louise Chen has surveyed 50 physicians regarding Vascepa.
Following the survey she writes: “The results underscore our belief that the market opportunity is under-appreciated. Therefore, we are reiterating our OW rating and 12-mo. PT of $35 ahead of what we expect to be an acceleration in the uptake of Vascepa in 2019+.”
In particular, the recent REDUCE-IT study positions Vascepa to be the first drug to cost-effectively help address cardiovascular risk beyond cholesterol management. Bear in mind that heart disease is the No. 1 cause of death among Americans, with around 800,000 deaths every year.
All five analysts covering AMRN rate the stock a buy. They see (on average) upside of over 70% for share prices over the next 12 months. Get the AMRN Stock Research Report.
Teladoc Health (TDOC)
Teladoc Health Inc (NYSE:TDOC) is the most widely used telehealth provider in the U.S., offering doctor services at any time 24/7/365, to resolve common medical issues via phone or online video chat.
Now that Teladoc has moved past its affair scandal (with the CFO resigning at the beginning of the year) the company once again looks like a very attractive investing proposition.
According to Premier, 4.3M, or 18%, of emergency department visits by chronically ill patients that could have been avoided, but instead cost the system $8.3 billion.
Piper Jaffray analyst Sean Wieland tells investors this data point, “attests to the need for increased access to care at lower costs, which can be addressed by telemedicine.” The analyst’s buy rating comes with an $88 price target (62% upside potential).
Similarly, Oppenheimer’s Mohan Naidu writes, “With an estimated annual $57B total addressable market (with Best Doctors) and low current penetration (estimated 0.2%), we believe there is significant runway for growth in telehealth.”
He expects increased membership and awareness to drive top-line growth for Teladoc from current levels. Get the TDOC Stock Research Report.
Optics maker Lumentum Holdings (NASDAQ:LITE) has had a challenging time recently. But it is not the end of the road. Far from it. In fact the Street is very upbeat about the company’s outlook. This “strong buy” stock has received seven recent buy ratings. The average price target of $60 indicates 10% upside potential.
Telecom in particular is booming: “Lumetum’s ROADM sales increased 110% y/y and 29% q/q in 2QFY19, and now are likely ~$90mn per quarter,” writes MKM Partners’ Michael Genovese. “The company is sold out of ROADMs, and is still adding capacity at customers’ request. ROADM demand is also strong in the U.S. and EMEA.”
Plus there is hope for datacom and 3D sensing. First the company is trying to launch new products to resume Datacom business growth. And secondly, new Android wins could help make up for the Apple shortfall.
“We believe Lumentum’s 3D sensing business is on track, with potentially more design wins from the Android market in the March quarter” says Rosenblatt’s Jun Zhang. Get the LITE Stock Research Report.
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.