So far in 2019, stocks have experienced a stellar growth spurt. We are now at record levels, with the S&P 500 trading up 19% year-to-date. The question is, can the rally continue? According to Barclays, the answer is ‘yes’. The firm now sees a 65% chance of a ‘melt-up’ with the S&P 500 surging a further 10%. But this bullish scenario requires 1) an easing cycle, and 2) that manufacturing weakness doesn’t morph into a full recession.
In short, it’s best to be wary. However, the best stocks to buy now go above and beyond the normal growth prospects. While looking for these kinds of investments, I examined seven of the best stocks to invest in, all with huge upside potential and support from the Street’s top analysts.
The best way to find these stocks is with TipRanks’ Top Analyst Stocks tool.
Why? Well, the tool reveals all stocks with strong buy ratings from Wall Street’s best-performing analysts. You can then sort the stocks by upside potential to pinpoint compelling investing opportunities.
At the same time, I was careful to avoid stocks that have big upside potential simply because share prices have crashed recently. Check the price movement over the last three months to be sure shares are moving in the right direction.
With that being said, let’s get straight down into taking a closer look at these seven stocks to buy now — all of which I believe look undervalued.
Stocks to Buy: Alibaba (BABA)
Chinese e-commerce king Alibaba (NYSE:BABA) continues to look like a compelling investing opportunity. The company recently announced a record breaking 6.18 Shopping Festival in China, driven by strong momentum in smaller cities and rural areas.
And in a show of support, five-star Stifel Nicolaus analyst Scott Devitt added Alibaba to the Stifel Select List back in late May. He explains that “the significant macro uncertainty creates an attractive entry point to own a leading global eCommerce company.”
Not only does Alibaba hold a dominant market share in China online shopping, it also operates an efficient, commission / advertising model in its core marketplace businesses, Tmall and Taobao, says the analyst. He has a $220 price target on the stock. Note that Devitt is ranked in the Top 50 of over 5,000 analysts, so this adds weight to his call.
Fifteen analysts have published buy ratings on BABA in the last three months. So no hold or sell ratings here. Their average price target of $221 indicates 28% upside potential lies ahead. Get the BABA Stock Research Report.
Stocks to Buy: Amarin (AMRN)
This biopharma is already experiencing strong momentum. Shares are up 70% year-to-date, and further growth lies ahead. That’s thanks to Amarin’s (NASDAQ:AMRN) fish oil derivative Vascepa. The drug is clinically proven to lower very high triglycerides by 33%, without raising bad cholesterol.
Recent trials also revealed a significant reduction in cardiovascular risk. The FDA will either approve or reject this potentially very lucrative label expansion on September 28, and approval should send shares soaring.
Unsurprisingly, the drug delivered record revenue for 1H19. AMRN is now guiding for full year revenue of $380-420 million (up from $350 million previously). What’s more, the company will also boost its U.S. sales team to around 800 people in October 2019.
“We believe AMRN’s power move is just the beginning of transformation into a money maker,” Roth Capital’s Yasmeen Rahimi contended. “Overall, AMRN has primed the commercial wheels for a huge momentum swing following label expansion, and we have confidence the current revenue guidance for FY19 will not only be met but likely surpassed.”
This ‘Strong Buy’ stock boasts six back-to-back buy ratings from the Street. Their average price target of $33 indicates upside potential of 42%. Get the AMRN Stock Research Report.
Stocks to Buy: KushCo Holdings (KSHB)
Cannabis stock and vape specialist KushCo Holdings (OTCMKTS:KSHB) is certainly worth a closer look. All five analysts rate KSHB a buy ahead of the print on July 11. Plus its $7.90 average analyst price target indicates the stock has significant room to grow. We are talking about over 50% upside potential from current levels.
Canaccord Genuity analyst Robert Burleson, for example, has a ‘Speculative Buy’ rating on the stock with a $7.50 price target. That’s in contrast to its current price of just $5.23. (All his cannabis buy ratings are termed ‘speculative’ due to the inherent risk in investing in the sector.)
Following a positive company management meeting, Burleson told investors: “Vape hardware demand continues unabated, evidenced by recent data from BDS Analytics showing vape’s increasing share of retail sales in [recreational use] markets, somewhat to the detriment of flower [or, dry cannabis] sales… As such, we believe KSHB’s revenue mix from vape hardware is likely to remain elevated.”
Similarly Roth Capital’s Scott Fortune sees shares surging to $8. According to Fortune, KSHB is leading the way in cannabis ancillary products and services. This puts KushCo in prime position to benefit from a rapidly growing legal cannabis industry. The best part is that the analyst sees a slew of catalysts ahead including securing large cannabis operators in key legal (CA) and new states. Get the KSHB Stock Research Report.
Stocks to Buy: CBS Corp (CBS)
Media stock CBS Corporation (NYSE:CBS) can climb over 28% in the next 12 months, say top analysts. This would see the stock trading at nearly $67 versus the current share price of just over $50. Note that shares have rallied 19% year-to-date — so we are already moving in the right direction.
Benchmark’s Daniel Kurnos believes the company is forging ahead despite headline uncertainty. “Despite the continued, swirling headline uncertainty around a potential (likely) Viacom (NASDAQ:VIA) merger and what that might mean for long-term management, we see ongoing strong execution at the Company level” writes the analyst.
When CBS reports 2Q19 results on August 8, he expects to hear positive commentary around advertising and OTT adoption, likely leading to some modest revenue upside. “At the end of the day, it still feels like CBS’ content library and OTT offering are massively undervalued, with any licensing deal a potential positive catalyst, although we acknowledge that short-term share performance is likely to remain impacted by some estimate volatility and the ongoing merger drama” the analyst concluded.
Meanwhile, out of 5 recent analyst ratings on CBS, all five are buys. Get the CBS Stock Research Report.
Stocks to Buy: Karyopharm Therapeutics (KPTI)
Karyopharm Therapeutics Inc (NASDAQ:KPTI) is developing medicines to improve the lives of cancer patients. The stock has experienced extreme volatility as of late — but a key regulatory decision means KPTI can finally get back on track.
On July 3, three days before the expected date, Karyopharm announced that the FDA had granted accelerated approval for Xpovio (selinexor). The drug is now approved for specific multiple myeloma (MM) patients with at least four prior therapies (among other conditions).
“Safety data showed a manageable and predictable safety profile” says HC Wainwright’s Ed White. “We find the label compelling and inline with expectations” the analyst added. He expects the drug to launch in the coming days at $22,000 for four weekly blister packs. White estimates Xpovio for this particular indication will have sales of $5.5 million this year, rising to $123.8 million in 2026.
As a result, he hiked his price target from $29 to $32. From current levels that suggests extreme upside potential of 263%. KPTI has now received four consecutive buy ratings in the last three months. The average price target works out at $22.50 (155% upside potential). Get the KPTI Stock Research Report.
Stocks to Buy: Vonage Holdings (VG)
Cloud communications provider Vonage (NYSE:VG) is buzzing right now. VG recently announced a savvy partnership with email marketing provider, Sendinblue. Vonage will provide SMS messaging services (through Nexmo) to Sendinblue, while Sendinblue adds email capability to the Nexmo API platform.
“We believe this move makes Nexmo a more complete solution when going up against rival Twilio Inc (NYSE:TWLO) as more cost-conscious customers may choose the email channel over SMS” cheers Stephens analyst Dmitry Netis. Sendinblue will also boost Vonage’s international growth, says Netis. For instance, the platform sends over 100 million emails daily to 80k+ users in 160 countries.
“Overall, we continue to believe Vonage is well positioned for 2H19 with continued strong growth in Nexmo (CPaaS) and improved bookings in the Application (UCaaS+CCaaS) business” states the analyst. He notes that VG trades at a significant discount (2.6x CY20 EV/sales) to CaaS peers at 4.9x.
Indeed, the company’s average analyst price target of $16 indicates 25% upside from current levels. All four analysts covering the stock rate VG a ‘buy’. “We like that Vonage added several large customers early in the year that are ramping” says Northland Securities’ Michael Latimore. Get the VG Stock Research Report.
Stocks to Buy: Healthequity (HQY)
Last but not least we have health savings account provider Healthequity Inc (NASDAQ:HQY) . The company has partnered with 45,000 employers and 141 plan providers and manages over $8.3 billion in assets. And with HQY’s new major deal for WageWorks in the bag, these numbers are bound to move higher.
On June 27, HQY announced that it had officially acquired WageWorks Inc (NYSE:WAGE) in a massive $2 billion deal. The deal received the thumbs up from the Street.
According to Citigroup’s Stephanie Davis, the $50 million synergy potential should “fuel out year growth as well as new wins.” Meanwhile five-star Cantor Fitzgerald analyst Steven Halper commented: “We view the transaction favorably, both strategically and financially.”
He continues, “We believe HQY can leverage WAGE’s complementary products, increased scale and unique distribution channels to generate new opportunities. The company’s primary goals for the acquisition center around becoming a premier single source platform for consumer directed benefits (CDB) and deepening its penetration of the employer market.”
The analyst ramped up his price target from $90 to $95 (47% upside potential). Overall, six analysts rate the stock a buy vs 2 hold ratings. That’s with an average analyst price target of $86 (33% upside potential). Get the HQY Stock Research Report.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.