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3 “Strong Buy” actions that tick all the boxes
It has been said that deadlock is a feature, not a bug, of the US Constitution, and we may be about to find out. The election results left a few questions to be answered, but some things stand out: Democrat Joe Biden is the winner of the presidential race, but on the downside, Republicans appear to have made big gains. We look at the prospect of a divided government – a Biden administration with a Republican Senate and a Democratic House with a stronger minority. According to JPMorgan strategist Marko Kolanovic, this could be the best possible result. “A majority in the GOP Senate should ensure that Trump’s pro-business policies remain intact, and if Biden is confirmed, we should be able to expect a relaxation of the trade war, which should boost global trade and growth in corporate profits, ”Kolanovic said. Buying stocks is always a challenge, even in a bullish environment, but TipRanks gives investors the range of metrics needed to sort through raw market data and bring those nuggets to light. These include the analysts’ consensus score, upside potential and the Smart Score; each gives a data point for investors and, taken together, when they all line up, they give off a powerful signal. Analyst consensus is just that – an average derived from the full range of analyst ratings. The upside potential comes from the collected price targets of the share; it is a mathematical average which suggests the possible growth of the stock over a one-year horizon. And the Smart Score uses known predictors of market success to give stocks a score that points to performance over time. With that in mind, we used the TipRanks database to identify three stocks that tick all three boxes. Pacific Ethanol (PEIX) We will start with a diverse business, with production lines for food and feed as well as industrial alcohols and renewable fuels. Pacific Ethanol sells its products on the global market and recorded significant gains in 2Q20. Even with recent losses in account, the stock is up 795% this year. The gains have been in effect since July as the company increased production in response to demand for sanitizing liquors. Sales of alcohol for hand sanitizers were a major boost for Pacific Ethanol in the wake of the coronavirus crisis. Taking into account the new production and sales potential, the company has revised its 2020 profit estimates upwards to between $ 66 million and $ 86 million, so far the company is on the right track. Like many small-cap manufacturers, Pacific Ethanol was running profit shortfalls before this year – but COVID-19 has changed that. Profits turned positive in Q2 and stayed positive in Q3. The sudden change pushed investors higher on the stock, but Dayal, 5-star analyst at HC Wainwright, sees many reasons for an optimistic outlook here. “Investors should note that management has indicated that while the company has good price visibility, the volumes of specialty alcohol delivered to customers may vary on a quarterly basis. Since disinfectants are a key end market for specialty alcohols, the stock has come under some pressure with positive news related to the COVID-19 vaccine. However, we believe that the demand for disinfectants is expected to remain high as all economic activity increases in the near term. We believe that improving the balance sheet and cash flow allows the company to make investments in areas of the business that were previously overlooked and which may have been under-contributors as a result, ”Dayal said. This stock rates a buy with a target price of $ 16. This figure suggests an impressive upside potential of 174% for the coming year. (To see Dayal’s review, click here) The three recent opinions on PEIX are positive, making the consensus note a very unanimous purchase. PEIX shares are priced at $ 5.82 and have seen rapid growth in 2H20, but Rue expects to see more growth here; the average price target is $ 16.50, which implies a 183% growth for Pacific Ethanol. (See PEIX stock market analysis on TipRanks) New York Times Company (NYT) Our next title is a historic name in the publishing world. The New York Times company owns its eponymous newspaper, as well as an array of other media assets and Times-related brands. The company has a market capitalization of $ 6.4 billion and more than 30 business assets. Its leading brands attract 150 million readers each month and over 6.5 million paid subscriptions. In a news environment as fast-paced and chaotic as 2020, the NYT has reaped the rewards of people’s need to know. The stock is up 20% year-to-date, despite some drops in recent weeks. Covering NYT for JP Morgan, analyst Alexia Quadrani writes, “NYT remains our preferred stock at midcap, and we see growth in digital subs continue and will most likely reach 10m well ahead of the 2025 management target. ARPU and margin improvements over time will also make the action cheaper on earnings, which will offset the decline in valuation. While stocks may stay a little closer to the near-term range until we have more visibility on trends in 2021, we see selling today as creating an attractive entry point. The price target indicates a potential of 30% in the next 12 months. (To see the history of Quadrani, click here) The consensus rating of Strong Buy analysts on NYT is unanimous and based on 4 recent reviews. The shares have an average price target of $ 53, which suggests a 37% year-over-year increase from the current price of $ 38.53. (See NYT stock analysis on TipRanks) Thor Industries (THO) Last but not least, Thor Industries, a leading manufacturer of recreational vehicles. Recreational vehicles are a popular form of recreation and have seen modest gain during “ corona time, ” as they are compatible with social distancing requirements while still allowing households to vacation together. Thor owns seven brands, including well-known names like Airstream and Heartland. The company has a market capitalization of $ 4.8 billion and annual revenues of more than $ 8 billion. Quarterly revenues, which were reported for the third quarter earlier this month, have recovered from a short drop earlier this year. The top line for Q3 stood at $ 2.32 billion, the highest of the past four quarters. Profits, down from the third quarter of last year, showed a massive sequential spike, rising from 43 cents per share to $ 2.14. Leisure stocks have recently seen a resurgence and BMO Capital analyst Gerrick Johnson has taken a look at the sector. Of Thor Industries, Johnson writes, “Equities in leisure companies typically move more or less on retail sales results than on revenue or EPS. We believe investor attention will change after this quarter. Retail has caught up with investor expectations … We believe … Thor (THO) will have the longest legs in terms of consumer demand … Retail and restock cycle will last at least until the end of his fiscal year. To that end, Johnson rates THO as outperforming (ie buying) and his price target of $ 110 implies a 26% rise from current levels. (To see Johnson’s track record, click here) Once again, we’re looking at a stock with unanimous Strong Buy analyst rating; Thor has 4 recent purchase reviews. The stock also has an average price target of $ 115, which suggests a 32% bullish rise for the next 12 months. (See THO Stock Analysis on TipRanks) For great ideas for trading stocks at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. those of featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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