The markets have been in a tear of late, despite the headwinds caused by the new coronavirus pandemic. The question is how long will this last?
In a letter from Goldman Sachs, David Kostin, the company's chief US equity strategist, said markets will outperform other investments and analyst expectations for the next two years. He sees the S&P 500 reaching 4,600 by the end of 2022, which would mean a gain of 25%.
Kostin supports his position and gives four reasons for his optimism. The first three reasons are obvious: the economy is improving, earnings are rising and interest rates are low – all of which are drawing investors to stocks. But underneath them is all "Tina" (there is no alternative).
The stock market is currently the only place where investors can achieve significant returns and, according to Kostin, “stocks are becoming the default option”.
As investors turn to stocks, they are looking for data to support their choices. After all, even without an alternative, investors want to find the right moves.
With this in mind, we used the Investing Insights platform to locate three stocks with a Perfect 10 Smart Score.
The Smart Score is a data analysis tool that uses the real-time information collected in the database. The stock data is collected based on 6 separate factors, which are known to predict growth and share the valuation. The factors are averaged together and presented as a single digit score, on a scale from 1 to 10, so investors know at a glance the likely way forward for a stock.
Turning Point Brands ( TPB )
Turning Point Brands (NYSE 🙂 may not be a household name, but chances are you've heard of some of its brands. The company owns both Zig Zag, the well-known maker of rolling papers and branded goods, and Stoker & # 39; s chewing tobacco. Turning Point has a range of "active ingredient consumer products", including chewing tobacco, as well as snuff and vaporizers.
The company recorded earnings growth from 4Q19 to 1Q20, countering the corona trend, and saw quarterly sales in Q2 and Q3 reach $ 104 million, a 15% increase from the first quarter. Earnings have been rising steadily for the past three quarters, with third quarter earnings per share at 75 cents.
Stocks of the company have also risen. Shares in TPB are up an impressive 50% to date, eliminating any losses sustained during last winter's shutdown policy.
Five-star analyst Eric Des Lauriers covers this share for Craig-Hallum. He views TPB stock as a buy, and his $ 60 price target suggests room for 41% growth in the coming year.
Supporting his position, the analyst writes, “Turning Point Brands (TPB) delivered another strong quarter for beat and raise, surpassing all analyst estimates as the two core companies benefited from long-term secular trends and growth initiatives … strong core business trends will continue through 2021 and expect significantly higher profitability in NewGen as competitors exit the market. As strategic investments and M&A pick up, we are increasingly optimistic about TPB's long-term outlook … "
In general, the Strong Buy consensus score on Turning Points Brands is unanimous, on 5 Buy-side ratings. The stock is selling for $ 42.60 and the $ 46.46 average price target implies a ~ 9% increase from the current level. (See TPB Stock Analysis)
Gladstone Lands ( LAND )
The next step is a unique REIT, real estate investment fund. Gladstone (NASDAQ 🙂 owns and manages farmland and acquires high quality farms and related properties which it then rents out to independent farmers or agricultural holdings. The company's properties are actively involved in the production of a wide variety of crops, including strawberries, raspberries, blueberries, cabbage and watermelons. Gladstone boasts 100% occupancy of its properties, an enviable position for any REIT.
During the first quarter, when most companies felt the pain of the lockdown policy, Gladstone posted the strongest revenues and revenues of 2020. The most recent results, for Q3, showed sales of $ 13.99 million, an increase of 10% consecutively. Since the third quarter, Gladstone has acquired four new farms, covering a total area of ??nearly 1,400 acres, and received 99% of the rent in October. In fact, to shareholders, the company's portfolio is worth more than $ 1 billion in total.
Like most REITs, Gladstone pays a regular dividend. The fee of 4.4 cents per common share is paid monthly. At an annual rate of nearly 53 cents per share, it delivers a return of 3.6%.
One of the bulls is Maxim (NASDAQ 🙂 analyst Michael Diana who wrote, “We have discussed LAND since it went public in January 2013, and have consistently considered the investment thesis (valuation of farmland's value) to be sound, strategy (mainly targeting non-commodity crops such as fruits and vegetables) as superior, and its implementation (buying high quality farms at reasonable maximum rates) as strong. "
To that end, Diana gives LAND a Buy rating and a price target of $ 20 for one year, indicating that there is room for 36% growth.
Overall, LAND shares, along with the Strong Buy consensus rating, have a 12-month average price target of $ 18.17. This suggests a 24% upside potential in the coming year. (See COUNTRY Stock Analysis)
MarineMax ( HZO ] )
The last stock on our list is a retailer in the water recreation niche. MarineMax (NYSE 🙂 sells boats, yachts and ancillary services such as winterizing, new and used, across the spectrum of price points. The company profiles itself as a recreational retailer focusing on premium brands.
HZO has seen a strong appreciation in 2020, coping with the coronavirus. Shares are up 89% so far, much faster than the NASDAQ and S&P 500.
Stock growth is based on strong results for the company's fiscal year, which ended September 30. In the fiscal fourth quarter just reported, earnings per share declined consecutively, but exceeded forecast by a wide margin. Quarterly sales were $ 398 million. Full year 2020 sales were $ 1.5 billion, reflecting 25% same-store sales growth for the year. Earnings per share for fiscal 2020 were $ 3.37, more than double last year's figure.
When a company reports such results, it is no surprise that it has a Perfect 10 on the Smart Score.
B. Riley analyst Eric Wold is impressed with MarineMax's same-store sales and overall retail position. He writes, “HZO reported an impressive 4Q20 SSS growth of + 33%, against a two-year comp stack of + 13%, compared to our + 25% estimate and the + 14% consensus estimate. We believe the company's broad network of retail locations, strong relationships with the manufacturer, and investment in a digital / virtual platform can help the company make a meaningful contribution – and even in situations where most are closed during a pandemic. "
In accordance with his comments, Wold gives the stock a Buy rating. His price target of $ 40 implies a ~ 27% gain for the coming year.
Overall, MarineMax's Strong Buy consensus rating is based on 6 reviews, split into 5 buy and 1 hold. The stock is selling for $ 31.53, and the $ 35.80 average price target suggests there is room to grow 13.5% from that level. (See HZO Stock Analysis)
Visit Investing Insights for more ideas for stocks that trade at attractive valuations.
