It’s time for investors to do some year-end planning. What worked? What didn’t? If you’re looking to add to your portfolio, identifying strong buy stocks is a good place to start.
Part of every investor’s due diligence is to look at analyst ratings. While they get it wrong sometimes, analyst opinions carry weight because they are deeply immersed in specific companies and sectors.
In 2023, those ratings go well beyond “Buy,” “Sell,” or “Hold.” The idea was to allow analysts more nuance in their recommendations. Therefore, when analysts give a stock a “Strong Buy” rating, investors should pay attention. That’s a message to investors to look at those stocks closely.
To be clear, it’s virtually impossible to find a stock that will have a consensus “Strong Buy” rating. However, the stocks on this list are being covered by a statistically significant number of analysts and are getting a substantial number of “Strong Buy” ratings. Therefore, they can be considered strong buy stocks. Here are three of those stocks for you to consider.
Zscaler (ZS)
Zscaler (NASDAQ:ZS) is a leader in a specific kind of cybersecurity built on zero trust architecture. What problem is zero trust attempting to solve?
Even before companies were adopting a fully remote or hybrid environment, there were networks spread over multiple cloud networks with remote users and multiple IoT devices. However, having these devices outside of a company’s “perimeter” opens the door for hackers and malware to infect a system.
And ironically, as much as artificial intelligence (AI) is expected to aid companies in their cybersecurity systems, generative AI is increasing the threats these companies face.
That’s where zero trust comes in. This system requires each device and user to be checked with every demand for access. Zscaler’s Zero Trust Exchange is a cloud-based AI-powered threat prevention system. In the third quarter, the company grew at a 30% clip that led the market. The company’s guidance suggests that’s just the beginning.
Out of 40 analysts that have given ZS stock a rating in the last three months, 29 give the stock a “Strong Buy” rating. If you want exposure to strong buy stocks in the cybersecurity sector, Zscaler merits your attention.
Salesforce (CRM)
Salesforce (NYSE:CRM) is one of 2023’s best-performing stocks. The company’ has the world’s number one generative AI solution for customer relationship management.
As of this writing, CRM stock is up 93%. Understandably, investors on the sidelines may be hesitant to chase the stock higher. Howeer since this is an article about “Strong Buy” stocks, you already know that Salesforce has that going for it.
However, in December, Salesforce and Apple (NASDAQ:AAPL) announced an expansion of their partnership. The new integrations will further embed Salesforce into the Apple ecosystem. And on December 12, the company announced that they were expanding their partnership with Automatic Data Processing (NASDAQ:ADP) “to reimagine ADPs client experience for ADPs more than one million clients.
That being said, the current consensus price target for CRM stock points to a 7% gain. However, of the 48 analysts that issued a rating on Salesforce in the last three months, 29 gave the stock a “Strong Buy” rating.
Vale (VALE)
If you prefer strong buy stocks that also pay attractive dividends, Vale (NYSE:VALE) looks very appealing. It’s a Brazilian-based company that is offering attractive value with a forward price-to-earnings ratio of 6.7 times. it also pays a semi-annual dividend that currently yields 6.94%.
The company is best known for mining iron ore and copper. That would be enough to get it on the radar of many investors. However, the company is also one of the world’s leading miners of nickel. In addition to lithium, nickel is a metal that is essential to the EV industry.
VALE stock is down 12% in 2023 due, in part, to two consecutive quarters of misses on the top and bottom lines. However, the company got back on track in its most recent quarter and is up approximately 8% in the last three months.
Analysts are forecasting earnings growth of 29.7% in the next 12 months. That corresponds to a consensus price target that gives VALE stock a 17% gain in that same period. Out of 23 analysts, 14 give the stock a “Strong Buy” rating.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
