There has been a lot of talk of concern lately. Wall Street viewers are talking about inflationary fears, over-spending government spending, impending tax hikes, rising government bond yields – all signs that should forecast poorly for stock markets. However, regarding the markets for Credit Suisse (SIX 🙂 CSGN, US stock strategist Jonathan Golub thinks the fears are exaggerated – at least for the short term. He believes the S&P 500 has more leeway and expects profits to continue for the rest of this year.
He points to the tech sector, which some fear is growing into a new bubble, such as the famous dot.com eruption in the late 1990s, and says, "The market is simply worth more than it was because it's good. not the same asset anymore. It is not only that the market generates more cash flow, the part of the market that improves the most is the part of the market that has grown the most. "
In other words, the actual technology behind technology stocks is simply better than it was 20 years ago – and provides more value to boost stocks.
With this in mind, we looked for stocks that Wall Street identified as exciting growth. It's a cliché to remind everyone that past performance is not a guarantee of future results, but if a stock consistently shows a strong rise in the stock over an extended period of time, that's a positive sign for investors.
Using the Investing Insights platform, we joined three analyst-backed names that have already made impressive profits and have strong long-term growth stories. 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. Let's take a closer look.
Green Plains, Inc. ( GPRE )
We start with Green Plains Renewable Energy (NASDAQ :), a large biorefinery company in the US states of Plains. Green Plains annually refines renewable crops – especially maize – into value-added products including biofuels, corn oils, animal feed and industrial alcohols. Green Plains is a major producer of ethanol fuels, produced from corn and used as an additive in most commercial gasolines, as well as alcohol-based hand sanitizers.
Biorefinery is big business; Much of our economy is powered by organic and agricultural products, and Green Plains had total sales of $ 1.95 billion last year. This meant that turnover was 32% lower than in 2019, mainly as a result of demand problems as a result of the corona crisis. The company reported lower production runs, lower ethanol prices and lower export volumes for the year. In the fourth quarter, the most recently reported quarter, sales declined 33%, with sales of $ 478.8 million.
The biggest problem facing Green Plains is less corona than politics. Ethanol prices have fallen due to oversupply. While that abundance is due in part to lower demand last year, it is also due to increased production in the expectation that, with the rise of the Washington Democrats, at least in part on a 'green' platform, there will be government mandates for more biofuels. That has not yet materialized.
Despite slower sales, Green Plains' share has increased 448% in the past 12 months. This begs the question: why? At least one answer can come from a shift in production priorities.
Green Plains management is directing the company's production towards Ultra-High Protein technology as a way to increase the value of corn-based food additives. The technology shows promise to increase the value of the planted area, measured in usable nutrition. In April last year, the Green Plains delivered the first running shipments of ultra-protein product from their manufacturing facility in Shenandoah, Iowa.
Five-star analyst Craig Irwin, of Roth Capital, sees the shift to high protein as the main point for this stock.
“We view weak ethanol crush margins in 4Q20 as backward looking and focus on initiatives that drive EBITDA growth. The HighPro technology is currently well understood by Shenandoah, IA coming online April 20 and mgmt. announced that three new factories would move to the HighPro building this year…. GPRE will produce ~ 380m lb of corn oil after HighPro is adopted… The company's HighPro technology increases corn oil yields by 50%, and we believe tightening demand could support strong price momentum, ”said Irwin.
In line with this outlook, Irwin views the stock as a buy, and his $ 43 price target implies a 61% one-year increase over the stock.
Overall, Green Plains is currently getting full support from the rest of the Street. GPRE's Strong Buy consensus rating breaks down to Buys-4 alone, in fact. With an average price target of $ 32, the upside potential is ~ 20%. (See GPRE Stock Analysis)
Babcock & Wilcox Enterprises ( BW )
Switchover: Let's look at Babcock & Wilcox Enterprises (NYSE :), an Ohio industrial manufacturer. The company is known for its industrial steam boilers, but in recent years has shifted to greener technology: recycling biomass and waste for energy production and air emission control systems. The company remains connected with its roots in boiler technology and is a leader in improving efficiency and cleaning systems for thermal power units.
In short, BW's industrial position is in high demand. The company brings a long history of practical know-how to its jobs and announced several new contracts in Europe, the Middle East and Indonesia in March this year. The contracts cover aftermarket parts, service and maintenance for utility installations and total more than $ 24 million. At its home base, BW also announced a $ 20 million contract to design and install thermal power plant systems in North America.
These new contracts come after a year in which BW & # 39; s shares rose dramatically, by 809% in the past 12 months. This profit includes a peak of 42% that occurred at the end of March, after the new contracts were announced.
Despite the stock price surging, with a current market cap of $ 800 million, B. Riley analyst Alex Rygiel believes BW shares have more room to grow.
“We believe that BW has a strong climate control / renewable / ecological tailwind and, combined with its global expansion and strong pipeline of opportunities, is positioned for strong double digit sales growth, margin expansion and profitability in the coming years. …. BW ended 2020 with a total backlog of $ 535 million as previously announced, growing 21% year-over-year, 12-month backlog of $ 302 million and more than 60% expected from the thermal segment We expect the backlog to increase through 2021 as some delayed projects return due to COVID, ”wrote Rygiel.
In addition to these cheerful comments, Rygiel gives BW a Buy rating with a price target of $ 12. His target points to confidence in growth of 29% this year.
In general, analysts are optimistic about BW stocks. 3 Purchases allocated in the past three months amount to a Strong Buy consensus of analysts. Additionally, the $ 11.33 average price target puts the 12-month potential profit at ~ 22%. (See BW Stock Analysis on TipRanks)
ClearSign Technologies ( CLIR )
The latest growth stock we are looking at, ClearSign Technologies (NASDAQ :), has shown a 775% stock increase over the past 12 months. The stock shows the profit that is possible in a healthy penny stock; a year ago it traded for only 64 cents a share and now it trades for over $ 5.
The company behind that growth specializes in emissions control technology – which, in today's political environment with increasing "green" priorities, is a growth sector. ClearSign offers a range of technical solutions for cleaning emissions for various industries: energy, oil and gas, boilers and chemical processing. ClearSign is headquartered in Seattle, with regional offices in Tulsa, Oklahoma and Beijing, China.
In recent weeks, ClearSign has closed its year of strong growth with several new business announcements, including the completed application for certification of firetube boiler burner burners in China, and the simultaneous agreement with that country's leading boiler maker Jiangsu Shuang Liang Boiler Company. to provide next-gen, ultra-low emission, high efficiency integrated boiler burners for the Chinese market. The company expects a government response to the application by the end of 2Q21. At the same time, ClearSign announced that it has successfully completed a major three-burner project in California, on behalf of an energy infrastructure company. ClearSign also contracted with a European refinery customer to design, build and install a nuclear process burner plant.
Another five-star analyst from the Streets, Amit Dayal, in his account of this share for H.C. Wainwright sees the business transaction listed above as groundbreaking for ClearSign.
“These developments, especially in the Chinese market, have taken place at a faster pace than we previously expected. We believe that the company's cooperation with Jiangsu Shuang Liang Boiler Co. Ltd, China & # 39; s leading boiler manufacturer with more than 700 active sales staff and sales offices located all over China, positions ClearSign extremely favorably to take market share in a market with 350,000 boilers with a size of about $ 8B. Likewise, we believe the company's emerging relationship with California Boiler now opens up the opportunity for US boilers in a more meaningful way for the company. "
To that end, Dayal gives CLIR a Buy rating along with a price target of $ 10, suggesting that the stock is up 76% for a year.
Small-cap stocks don't always get much analyst attention – they often fly under the radar. Dayal & # 39; s is the only review recorded for this stock, which trades at $ 5.65. (See CLIR Stock Analysis)
For more ideas for stocks trading at attractive valuations, visit InvestingInsights .
