How can you find compelling investing opportunities in the current environment? With market volatility set to rise in the coming weeks, it’s best to be prepared. October is a notoriously volatile month, and this week’s heated presidential election debate did little to calm the markets — especially with the looming prospect of a contested election result down the line.
However, there are still stocks out there ready to outperform — you just have to find them. One possible way forward is to follow stock recommendations from analysts with a proven track record of success. TipRanks analyst forecasting service reveals the analysts with the highest success rate and average return measured on a one-year basis — factoring in the number of ratings made by each analyst.
Most importantly, the stocks highlighted below have scored only buy ratings from these top analysts in the last three months. No holds, no sells. That means these stocks boast a unanimously bullish Street outlook right now.
Here are the best-performing analysts’ six favorite stocks right now:
With no less than 36 recent buy ratings from top analysts, it’s clear that Amazon is riding a wave of bullish Street sentiment right now. After an upgrade from Bernstein’s Mark Shmulik on September 22, the stock scores a clean slate of buy ratings across the board.
Shmulik boosted his rating after admitting that he “undervalued the power of being the sole e-commerce demand aggregator.” Covid has pulled forward secular trends, says Shmulik, from e-commerce to digital advertising and cloud, with Amazon a primary beneficiary across all three revenue pools.
At the same time, Amazon’s logistics strength is a key upside driver worth highlighting. “We believe investors under-appreciate the magnitude of the strategy behind, & the implications of, the dramatic buildout in Amazon’s logistics network (what we are calling AMZL)” five-star RBC Capital analyst Mark Mahaney wrote on September 17.
Not only is AMZN expanding its global distribution square footage 50% this year (3X more than its 2019 network growth) – but it will also soon be handling delivery from desktop to doorstop for 85% of all its packages.
“AMZL provides Amazon with major service & cost advantages that should shine through this Holiday Season… [and] creates a long-term opportunity for AMZN to become a leading 3P delivery service/carrier” Mahaney concludes. He has a $3,800 price target on the stock (21% upside potential).
It’s all go, go, go over at GoDaddy. The web hosting company has racked up an impressive 13 buy ratings from top analysts in the last three months. That’s alongside a $96 average stock price forecast (26% upside potential).
On September 29 GDDY revealed that its recently-acquired content design app Over is now ‘deeply integrated’ into its website builder and set of marketing tools.
For top-rated Truist analyst Naved Khan, the Over integration “delivers on a key promise of the acquisition and should enhance the offering’s appeal to users.” And the native integration of GDDY’s Websites + Marketing Ecommerce with Facebook and Instagram shops is “a key milestone”, says Khan. As a result, the analyst reiterated his GDDY buy rating and $95 price target on September 29.
Meanwhile Rosenblatt Securities’ Mark Zgutowicz believes that GDDY deserves to move higher. His $96 price target indicates upside potential of 26% from current levels. “GDDY offers an increasing mix of higher growth and margin from its expanding brand presence in the DIY website builder market” he commented.
Zgutowicz, who boasts a 39.6% average return per rating, points out that GDDY offers a steady 10% revenue/+12 FCF y/y growth profile with a history of relatively pristine profitable financial management.
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Exact Sciences has just released very encouraging initial data for a blood-based screening test for six different cancer types (esophageal, liver, lung, ovarian, pancreatic, and stomach). The test identified 87% of cancers in its training cohort (n=292) and 83% in its validation cohort (n=145).
“We believe the initial data is promising and should be viewed positively, especially in light of the rising interest in multi-cancer screening tests following ILMN’s acquisition of GRAIL” cheered Canaccord Genuity’s Max Masucci.
Illumina is splashing out $8 billion to snap up its former-spin off Grail, which also focuses on multi-cancer screening. “We see no reason why EXAS should be denied equal credit for its multi-cancer screening program (vs. GRAIL), which may imply that EXAS’ market cap is, in fact, undervalued” the analyst continued.
Masucci reiterated his buy rating and ramped up his EXAS price target from $115 to $120 on September 24. From current levels that suggests 18% upside potential. Notably this is an analyst with an 83% success rate and stellar 48.1% average return per rating, according to TipRanks.
He also estimates that 70M+ Covid-19 tests will be completed in Q3, vs. an estimated ~32M in Q2, which marks upside for EXAS’ Q3 Covid-19 testing revenues. Overall, Exact Sciences shows 11 back-to-back top analyst buy ratings with a $119 average stock price forecast.
According to Oppenheimer’s Brian Nagel, CarMax represents a notoriously controversial stock. After chatting with clients, he notes concerns over more challenging comparisons through the rest of fiscal 2020 as well as pressure from rivals Carvana and Vroom.
However, as far as the Street goes, the outlook on CarMax is 100% bullish. Indeed, KMX scores seven recent buy ratings from top analysts, with an average price forecast of $119 (28% upside potential).
According to Nagel, the strategic and competitive positioning of KMX is improving and he looks upon any nearer-term weakness in shares as a buying opportunity, for investors focused upon the next several quarters.
“At current levels, shares continue to trade at a level that we believe under-appreciates meaningfully near- and longer-term sales and profit potential of KMX” the analyst wrote on September 28. His buy rating comes with a $130 price target, which translates into 40% upside potential.
KMX will soon launch a new marketing campaign, says Nagel, highlighting for customers the company’s now much more expansive online and omni-channel capabilities. With a 75% success rate and 25% average return per rating, Nagel is one of the Top 25 analysts ranked by TipRanks.
Leading semiconductor stock Monolithic Power recently positively preannounced September quarter earnings. Management now sees September quarter revenues up +38.6% q/q at the mid-point, up from up +10.1% q/q, an impact of ~$53 million.
Following the update, five-star Rosenblatt Securities analyst Hans Mosesmann reiterated his MPWR buy rating and 12-month price target of $300. Thanks to his strong stock picking skills, Mosesmann is ranked at #101 out of over 6,900 analysts tracked by TipRanks.
“We continue to like the MPS story on the company’s strong competitive position through its move to 300mm wafers, higher ASPs (average selling prices) and market share gains, and its programmability that allows for scale into key growth markets” he explained on September 15.
Noting that Monolithic grows at 2-3x the industry, he adds “We have a higher conviction that MPWR will hit numbers in the back of FY2020 and FY2021 and expand its market opportunities.” And that’s on top of a balance sheet where FCF/share is growing at +20% y/y.
All in, MPWR sports 8 recent buy ratings from top-performing analysts- giving it a firm Strong Buy analyst consensus. The average analyst stock price forecast works out at $285, with shares currently up 55% year-to-date.
All eighteen best-performing analysts covering Alibaba are bullish on the Chinese e-commerce giant right now. Alongside 18 buy ratings, BABA scores an average top analyst price target of $311.
Alibaba has just held its virtual 2020 Investor Day conference in Beijing- and analysts liked what they heard. For instance, Raymond James’ Aaron Kessler has a ‘Strong Buy’ rating on BABA, calling Alibaba’s opportunity ‘massive’ across domestic consumption, cloud computing and data intelligence, and globalization.
Similarly, Robert W. Baird’s Colin Sebastian told investors that he is “bullish on Alibaba given the massive market opportunities and the company’s sophisticated technological infrastructure.” A Top 20 analyst, Sebastian reiterated his BABA buy rating and $275 price target following the event, adding that Alibaba “boasts an impressive import infrastructure with increasing efficiencies even amid rapid growth.”
Meanwhile Loop Capital analyst Rob Sanderson now assigns a $100 billion valuation to Alibaba’s cloud business (vs $80 billion previously). Post investor day he said he sees BABA’s online shopping division as potentially underappreciated by the market. As a result, Sanderson boosted his price target from $280 to $350 (26% upside potential) on September 28.
And on a further encouraging note, Oppenheimer’s Jason Helfstein highlights that, according to the National Bureau of Statistics of China, August total retail sales increased 0.5% year/year, the first month in 2020 with positive growth.