As the highly anticipated Amazon Prime shopping days are upon us, investors are on the lookout for lucrative opportunities. We have delved into the stock market to identify 15 promising stocks that are poised for upward movement.
Criteria for Selection
To compile this list, we began by analyzing the S&P 500 and pinpointing stocks with the most potential based on analyst price targets. Our goal was to identify stocks that are highly regarded by analysts. We meticulously steered clear of stocks that may appear undervalued but are widely criticized by industry experts. After all, stocks with such characteristics often have hidden concerns tied to their discounted valuation.
Determining Upside Potential and Popularity
Determining upside potential is a straightforward process. By examining analysts’ price targets and comparing them to current stock prices, a clear picture emerges. However, we went a step further to gauge popularity. Specifically, we analyzed the number of Buy ratings compared to the total number of ratings for each stock. For reference, an average Buy-rating ratio for S&P 500 stocks hovers around 55%. Only those stocks surpassing this typical threshold made it onto our list.
The Top 15 Stocks with High Upside Potential
After conducting a thorough analysis, we present to you the 15 stocks that not only display promising upside potential but also enjoy favorable ratings from analysts:
- Warner Bros. Discovery (WBD) – A prominent player in the media and entertainment industry.
- Moderna (MRNA) – A reputable drugmaker with notable contributions in healthcare.
- Enphase Energy (ENPH) – A leading provider of solar-technology solutions.
- SolarEdge Technologies (SEDG) – Another key player in the solar-technology sector.
- Caesars Entertainment (CZR) – Distinguished casino operator offering top-notch entertainment experiences.
- MGM Resorts International (MGM) – Renowned for its world-class casino resorts and entertainment offerings.
- CVS Health (CVS) – A well-established chain of drugstores catering to various healthcare needs.
- International Flavors & Fragrances (IFF) – A giant in the food and cosmetic additive industry.
- Marathon Oil (MRO) – A reputable refiner fueling the energy sector.
- APA (APA) – An esteemed energy producer making significant contributions to the industry.
- Humana (HUM) – A leading health-insurance provider offering comprehensive coverage.
- AES (AES) – A prominent utility company providing essential services.
- Newmont (NEM) – A gold mining company boasting considerable expertise in the field.
- PayPal Holdings (PYPL) – A renowned digital payments company facilitating secure and convenient transactions.
- Walt Disney (DIS) – A legendary name in the entertainment industry, known for its magical experiences.
With these 15 stocks showcasing immense potential, investors have a myriad of captivating options on their hands. As the Amazon Prime shopping days unfold, keep a close eye on these stocks as they have the potential to soar to new heights.
Analysts’ Stock Picks: Do They Get It Right?
It’s a diverse mix of stocks. Warner and Moderna may not generate profits in the upcoming year, but the remaining stocks trade at an average of approximately 17 times the estimated earnings for the next 12 months. This puts them at a discount compared to the market’s multiple of 19 times.
Despite weak returns, analysts remain undeterred. The average Buy-rating ratio stands at around 67%, with price targets suggesting a potential upside of over 40%.
But does this strategy actually work? Can analysts accurately predict stock performance? While there are no guarantees in investing, sticking to the same strategy over the past year has yielded promising results. The top 15 stocks identified as having the most potential upside, along with an above-average Buy-rating ratio, delivered an average return of about 45% over the past 12 months. On the other hand, the 15 stocks with a better-than-average Buy-rating ratio but lower upside implied by price targets returned approximately 9% over the same period.
Interestingly, all 285 stocks that had a better-than-average Buy-rating ratio a year ago achieved an average return of 15% over the past 12 months, aligning with the overall market performance.
Overall, analysts performed admirably in selecting winning stocks last year. However, only time will tell if they can replicate this success in the year to come.
As always, it’s important to remember that a stock screen serves as a starting point, helping to narrow down the list of potential investments to a more manageable level. Once new ideas are identified, further research into each individual opportunity can commence.