For investors looking for a hint about policymakers' views of the economy, the Federal Reserve has come through. The central bank released the minutes of its most recent policy meeting – at which it decided not to raise interest rates or scale back its easy-money policy – and an inside look at the Fed committee's deliberations shows that the decision was a broad base. The Fed is in no hurry to move to a tighter money policy, and the easy lending and low interest rates of recent years will continue.
It is another cause for optimism among investors, who are also feeling optimistic after the March jobs report, the massive $ 1.9 trillion cash infusion of the COVID bill, the prospect of additional federal spending under the Biden administration. and the continued acceleration of the COVID vaccination program. All of this suggests that by mid-summer there is a workforce that can leave the COVID restrictions, a growing economy and a lot of money to fuel growth.
JPMorgan CEO Jamie Dimon summed up the bullish case this week in his shareholder letter: Successful vaccine and euphoria around the end of the pandemic, the US economy is likely to boom. This boom could easily continue into 2023, as all spending could continue well into 2023. "
So in a growth environment, it is time to look at growth stocks. According to the analysts, we used the platform Investing Insights in our search for interesting names for growth. Each analyst-backed ticker is tied to three stocks to fit the bill and is poised to take more gains on top of their impressive gains since the start of the year. Importantly, these stocks also score a smart score of "Perfect 10".
The platform gives each stock a one-digit score, based on the sum of 6 separate factors. The factors used are known to correlate with future overperformance; when they line up, this is a strong indicator for buyers to be aware of. Here are all the details.
Full House Resorts ( FLL )
We start in the casino business, where Full House Resorts Inc (NASDAQ 🙂 has a long history. The Nevada-based company operates five casinos in four states. Full House is known for its association with big names in the business world; his leadership over the past 25 years has included innovators such as Allen Paulson and Lee Iacocca.
Over the past 12 months, Full House has seen strong stock growth, with stock up 726%. The company struggled with the COVID pandemic in 1H20 – but in the second half of last year, when the economy got back on track, revenues quickly recovered and stocks soared. In the fourth quarter, Full House reported $ 38.3 million in revenues, only 1.7% less than the same quarter a year ago. The company reported net profit of 12 cents a share in 4Q20, compared to net earnings per share of 15 cents a year earlier.
The pandemic closures were visible in the full year 2020 results, which showed $ 125.6 million on the top line – a 24% drop from 2019. However, earnings were positive, with a gain as of share for the full year 2020 of 1 cent per share. dramatic reversal of the 22 cents per share loss reported for 2019.
Craig-Hallum's five-star analyst Ryan Sigdahl has been unabashedly cheerful in his coverage of this stock.
“FLL remains a top pick with several ways to win. Business has improved significantly with EBITDA margins more than doubled and which we believe to be sustainable (10% to mid-20%), long-term debt secured and supported by a capital increase financing attractive expansion projects, and a stock trading at a significant discount on comparisons, ”noted Sigdahl.
The analyst summarized, "We believe there is an asymmetric risk / reward opportunity in stocks given the undervalued benefit of sports betting / iGaming and the upside potential if the Waukegan casino license is awarded."
In line with his optimistic approach, Sigdahl sticks with the bulls. The analyst rates FLL as a buy, along with a price target of $ 12. Investors could achieve a 26% profit if this target is met in the next twelve months.
All in all, it's clear Wall Street agrees with Sigdahl here – FLL shares have three recent ratings, they're all for sale, and analyst consensus is a strong buy. The stock is priced at $ 9.50, with an average price target of $ 11.17 indicating 17% upside potential. (See FLL Stock Analysis)
Travelzoo, Inc. ( TZOO )
The travel industry was slammed by the coronavirus crisis, Travelzoo Inc (NASDAQ :), an online marketplace offering vacation and travel packages to its 30 million member base, suffered declining sales and revenues in the first half of 2020. As of 2H20, the company has seen a partial recovery, although revenues remain lower year on year.
The combination of recovery and a reopening economy with potential consumers sitting on their savings has led investors to be optimistic about travel. Shares of Travelzoo have been steadily and steadily increasing faster over the past 12 months and the stock has recorded a 271% gain during that time.
Company revenues were $ 12.5 million in the fourth quarter, down 51% year-over-year – although they were 78% higher since the company's biggest losses in the second quarter. Earnings show a better story as earnings per share have turned positive, coming in at 2 cents per share after four quarters of net losses.
Barrington analyst James Goss makes a clearly positive argument for Travelzoo.
“As leisure travel picks up again, there is a significant chance of scaling revenues back to pre-pandemic levels and beyond. We believe this presents a significant opportunity to leverage those revenue gains against a much more tightly controlled cost basis. While the timing of achieving these profit levels is uncertain in the current context, which still includes mostly closed borders, management is clearly determined not to waste the opportunity to improve its profitability metrics as an outgrowth of this crisis, ”said Goss. .
In light of this outlook, Goss rates the stock as an Outperform (i.e., buy), with a price target of $ 24, implying a 41% rise for one year.
Travelzoo recently picked up three analyst reviews, two of which are to be bought and one to be detained. This gives the stock an average buy consensus rating. The $ 22 average price target suggests ~ 30% upside potential for the next 12 months. (See TZOO Stock Analysis)
Citi Trends ( CTRN )
We are shifting gears and looking at the retail apparel industry where Citi Trends Inc. (NASDAQ 🙂 has been active since 1946. The company is based in Savannah, Georgia, and operates both online and through a chain of more than 570 stores across 33 states. Citi Trends offers discounted clothing to the urban market.
As a physical retailer, Citi Trends has benefited directly from the return of the American consumer to purchases – and from that consumer's currently deep pockets. The company's fourth-quarter revenue was $ 251.9 million, its best quarterly earnings in more than two years and more than 19% year-over-year, while quarterly earnings per share at $ 1.81 were 115% higher than the 84 cent reported in 4Q19. The company's management provided forecasts of 11% to 15% revenue growth for 2021.
These results came after the previous two quarters matched pre-COVID earnings and surpassed pre-COVID earnings, making it the third straight quarter of solid results. Subsequently, the stock has risen by 811% in the past 12 months.
In his report for Craig-Hallum, analyst Jeremy Hamblin says he believes the recent performance of Citi Trends is only the tip of the iceberg.
“While the guidance conveniently exceeds expectations, we continue to see potential benefits with numerous potential benefits through the timing of tax refunds and the Easter holidays, along with incentive money that will overly benefit Citi Trends' core customer. Hamblin wrote.
The analyst added, "Since a majority of CTRN's customer base is made up of Americans earning less than $ 50,000 a year, we expect CTRN to see too much of an advantage over other third-party retailers. round of incentive money that will increase. Monthly income of American families for March / April … "
To this end, Hamblin rates the CTRN as a buy, and sets a target price of $ 125, which is a 34% increase for the coming year.
Some stocks are flying under the radar, and CTRN is one of them. Hamblin & # 39; s is the only recent analyst review of this company and it is decidedly positive. (See CTRN Stock Analysis)
For more ideas for stocks trading at attractive valuations, visit Investing Insights .
