Stuck for stock inspiration? Look no further. These are some of the best-performing analysts of 2018, and here are a few of the names they are betting on for 2019.
With volatility showing every sign of continuing into 2019, it could make sense to follow the advice of analysts with a proven track record of success. Here we used TipRanks analyst ranking service to pinpoint Wall Street’s best-performing analysts. The site uses a natural language-processing algorithm to rank and track the latest recommendations from over 5,000 analysts. All the analysts covered here are in the top ten for returns on a one-year basis, with no benchmark and across all sectors.
Here are the best-performing analysts’ five favorite stocks right now:
Oppenheimer’s Michael Wiederhorn (Track Record & Ratings) is one of the best-ranked healthcare analysts for 2018. He is currently tracking an impressive 72 percent success rate and 17 percent average return per rating. On his buy list? Centene Corp. The company is a multi-line healthcare enterprise that provides services to government healthcare programs.
According to Wiederhorn, Centene stands to benefit from growing demand for Medicaid managed care, as states are increasingly outsourcing traditional Medicaid and higher acute populations to managed care.
“Following its Health Net acquisition and now with its acquisition of Fidelis, Centene should benefit from multi-year synergy opportunities and further expand its Medicare Advantage presence” writes the analyst.
And with a ‘significant’ margin opportunity’ ahead, Wiederhorn concludes: “We believe Centene will continue to boast strong revenue and earnings growth prospects for years to come.” He reiterated his buy rating on October 24 while boosting his price target from $158 to $165 (16 percent upside potential).
Also in the stock’s favor comes a bullish move by Leerink Partners. Five-star analyst Ana Gupte upgraded CNC on October 24. She also ramped up her price target from $130 to $155 citing “the blessing of consensus 2019E EPS on the Q3 commentary.” She now sees revenues potentially surpassing the $69B mark.
In fact, all seven analysts covering this ‘strong buy’ stock are bullish. This is with an average analyst price target of $162 (14 percent upside potential).
Are you ready for this double whammy? Canaccord Genuity’s Richard Davis (Track Record & Ratings) and RBC Capital’s Ross MacMillan (Track Record & Ratings) are respectively the No. 1 and No. 2 analysts ranked by TipRanks for 2018. Both tech analysts are betting on Smartsheet right now.
This is a software as a service application for collaboration and work management. Following a very strong quarter with ‘very encouraging’ results, RBC’s Ross MacMillan reiterated his Smartsheet buy rating on December 4. He also took his price target to $34 (29 percent upside potential).
“Smartsheet reported a strong F3Q19 with billings acceleration (+69% Y/Y vs. +55% Y/Y in F2Q and +50% in F1Q), better net customer adds and ACV growth, coupled with record net dollar retention” explained the analyst.
Meanwhile Davis calls Smartsheet “a best-in-class company in terms of the key foundational metrics”. Growth software stocks at the foothills of a large TAM the stocks almost always work, says the analyst. And in this case the probability that Smartsheet executes well for several more quarters, if not years, is high enough to warrant a bullish outlook.
As a result, he reiterated his buy rating on October 4 with a $35 price target (33 percent upside potential).
Overall, four analysts have rated the stock in the last three months- and all are bullish. This is with an average price target of $35.
Jefferies’ Mark Lipacis (Track Record & Ratings) is a big fan of chip stock Nvidia. This top-rated analyst boasts an incredible track record on Nvidia specifically (with a 75 percent success rate and 118 percent average return per rating).
True, Nvidia has had a rough ride recently. Shares plummeted following a disappointing earnings report, costing Nvidia over $23 billion in market capitalization. Demand for chips to use in crypto mining has dramatically dropped as the prices of digital currencies have plunged.
“[T]he crypto hangover has left the industry with excess China inventory. It will take one or two quarters to work through it” explained CEO Jensen Huang on the company’s Q3 earnings call.
Not that Lipacis is too concerned. In fact, he has placed the stock on the firm’s list of high conviction franchise picks. According to Lipacis, Nvidia remains “a top play on secular themes” in artificial intelligence, gaming and autonomous vehicles. He advises “buying the confession.” And while the January quarter may be disappointing, the analyst predicts revenue quarter-over-quarter growth will reappear in the July quarter.
Lipacis reiterated his Nvidia buy rating on November 16. He lowered his price target from $320 to $246. However even this reduced price target still suggests compelling upside potential of 57 percent.
Overall, the stock scores a cautiously optimistic ‘moderate buy’ consensus rating. This breaks down into 22 buy ratings vs 8 hold ratings over the last three months. With a $231 average price target, analysts are forecasting sizable upside potential of 47 percent.
First Data is the largest merchant processor in the world, processing approximately 45 percent of all card transactions in the US. Oppenheimer’s Glenn Greene (Track Record & Ratings) has been bullish on First Data for almost two years. And for 2019, Greene is sticking to his bullish thesis on the stock.
‘You can’t be serious; shares too cheap to ignore’ exclaimed Greene in his November 14 investor report. The analyst, ranked #8 out of 5,142 analysts, sees 49 percent upside potential ahead.
Shares dropped 17 percent following third quarter earning results. However, Greene labeled the reaction ‘overblown’. He finds the current valuation ‘very compelling’, writing “We remain optimistic regarding First Data’s growth trajectory going forward, including for GBS N. America (50% of revenue), an area of investor concern following the quarter.”
According to Greene, the company holds a relatively rare position as merchant acquirer, network, and issuer processor. Plus “First Data benefits from the ongoing secular transition toward electronic payments, which we anticipate will continue indefinitely.” Greene anticipates a narrowing of First Data’s sharp valuation discount to peers as First Data de-levers and resumes a growth focus.
Out of 20 recent ratings on the stock, 17 analysts are bullish while three are staying sidelined. The average analyst price target of $27 suggests upside potential of 49 percent.
RBC Capitals’ tech analyst Matthew Hedberg (Track Record & Ratings) is one of the top 5 analysts ranked by TipRanks. He has just reiterated his buy rating on Nutanix, calling it ‘a disruptive force in hybrid compute.’ This comes with a $60 price target, indicating substantial upside potential of 41 percent.
“We remain bullish on the long- term opportunity to disrupt legacy on-premise infrastructure with hybrid compute solutions” Hedberg wrote on November 28.
He made the call following stellar third quarter earnings. Subscription billings grew 97 percent while subscription revenue grew 104 percent. Additionally, software and support billings grew 50 percent while software and support revenue grew 44 percent. Much of this success was driven by strong upsells, as 76 percent of bookings came from repeat customers.
“Results were strong, with in-line to better metrics while guidance moves higher” commented Hedberg, before adding “Ultimately we remain confident in the transition to a fast-growing subscription business with high FCF margins.” Indeed, management continues to believe it will hit or exceed $3 billion of software and support billings by FY/21.
In total, 11 analysts have rated the stock ‘buy’ in the last three months, with 1 hold and 1 sell rating. With a ‘strong buy’ consensus, the average price target stands at $64 (50 percent upside potential).