In a financial environment full of unprecedented levels of uncertainty, investors are at a loss. When it comes to finding an investment strategy that delivers returns, traditional methods may not be as reliable. So, how are investors supposed to get out of the rut?
In times like these, more comprehensive stock analysis can steer investors toward yield. Rather than just looking at more conventional factors such as fundamental or technical analysis, other metrics can play a key role in determining whether or not a particular stock is on a clear path forward.
Investing.com offers a tool that does just that. The Investing Insights measures six key metrics, including Investor, hedge fund and insider activity, while also taking analysts, bloggers and news sentiment into account. After analyzing each statistic, a single numeric score is generated, with 10 being the best possible result.
Using the Investing Insights tool, we were able to pinpoint three promising stocks that represent a & # 39; perfect & # 39; Smart Score of 10 scoring. Let's take a closer look.
Rush Street Interactive ( RSI )
We start with a gaming company, Rush Street Interactive (NYSE :). Based in Chicago and active in online social casino games since 2015, Rush Street now offers a range of online social games for casino operators in regulated markets. The company operates in 8 states, including Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York and Pennsylvania – and with live games in Colombia, Rush Street was the first US company to launch online sportsbook gambling in Latin America. .
Casino-style gaming is a big business, and Rush Street's strong position caught the attention of a special acquisition company (SPAC). The deal – a business combination with dMY Technology Group II Inc (NYSE 🙂 – launched the RSI ticker on December 30 at the standard SPAC price of $ 10 per share. At the end of the first day's action, RSI was trading at $ 21.51. The company currently has a market cap of $ 4.26 billion.
In November, shortly before the merger that the company made public, Rush Street reported solid results for the third quarter of the year. Sales were $ 78.2 million, up 370% year-over-year. That gain was supported by a 135% growth in the number of active users on a quarterly basis – an important measure of the number of paying gamers. The company increased its full-year 2020 forecast by 20%, bringing revenue forecasts to between $ 265 million and $ 275 million.
Brad Erickson, writing from Needham, sees a clear path forward for Rush Street in the interactive online gaming niche and writes, “RSI is the leading iGaming player in the US, offering a differentiated user experience. In our opinion, RSI offers investors a cheaper way to play the legalization of online gambling in the US with a valuation that lies almost directly between physical peers and digital pure plays … we believe that RSI's brands are seen as a better user experience, leading to better retention over peers and ultimately the No. 1 market share in the US with the main features of lower playthrough rates and fewer payment-related conversion losses … "
In line with his comments, Erickson rates the stock as a Buy and his $ 35 price target implies a 63% upside potential for one year.
Strong Buy analysts' consensus rating on RSI is based on 4 reviews, including 3 Buys and 1 Hold. The stock is sold for $ 20.88; it has an average price target of $ 26.25, suggesting a 25% rise for the coming year. (See RSI Stock Analysis)
ConocoPhillips ( COP )
Subsequently, ConocoPhillips (NYSE 🙂 is a big name in the energy industry. This company has major hydrocarbon exploration and production assets in various locations around the world. ConocoPhillips has more than $ 35 billion in annual revenues, generates more than $ 7 billion in annual income and supports a market capitalization of $ 56 billion – all of which makes this the largest oil and gas producer in the world. The company is based in Texas and derives nearly half of its production from US sources.
Despite all that apparent strength, COP stocks continue to fall as they have only partially recovered from the & # 39; corona recession & # 39 ;. An unfortunate combination of low prices, reduced demand and the resulting reduced production led to lower revenues in 2020, especially in the first half. In the third quarter, the trend started to reverse, with sales reaching $ 4.35 billion, up 55% consecutively.
Other positive news: The company reported that it had $ 2.8 billion in cash and cash equivalents available at the end of the quarter, plus $ 4 billion in short-term investments, for a total of $ 6.8 billion in cash or near liquid assets. . It is an example of ConocoPhillips' deep pockets in the face of an ongoing crisis. Investors may also take heart from the company's announcements last month of new oil and gas discoveries off the Norwegian coast and in the Norwegian Sea.
Throughout everything, ConocoPhillips has maintained its commitment to the dividend payment as a tool to return profits to shareholders. The company increased its payment in the latest dividend statement, setting it at 43 cents per common share. This comes to $ 1.72 on an annual basis and gives a high return of 4%.
In his note on this stock, RBC's Scott Hanold says, "COP offers a return-driven value proposition, strong balance sheet and industry-leading distributions. The company appears well positioned to maintain competitive FCF generation through several cycles of commodity prices with 23 Bboe of resource potential … "
His optimistic outlook supports his Outperform (Buy) rating, and his price target of $ 58 suggests a potential rise of 37% for the next 12 months.
With 14 registered reviews, including 13 Buys and only 1 Hold, there is plenty of support for the Strong Buy analyst consensus rating at COP. The stock is priced at $ 41.68, and their average target of $ 52.54 implies a 26% rise over a year. (See ConocoPhillips stock analysis)
Brown & Brown ( BRO )
Brown & Brown (NYSE 🙂 is an insurance company – a company with annual sales of more than $ 2.3 billion. Based in Florida, the company has a market cap of $ 12.4 billion, has 300 office locations, and is the fifth largest insurance broker in the US. Brown & Brown deals in risk management and offers insurance products for clients of all sizes: government agencies, professional organizations, companies, companies and families and individuals.
Brown & Brown has seen its revenues and revenues increase year-on-year during the corona crisis – which makes sense, given that in uncertain times, a stable and reliable insurance company can expect an increase in sales. 4Q20 results showed revenue of $ 642.1 million, an increase of 10.9% year-on-year. Earnings were 34 cents per share, up 25% year-on-year.
On the insider front, James Hay, member of the Board of Directors, deposited $ 433,750 for a purchase of 10,000 shares on January 29. This puts the insider sentiment in positive territory here.
Truist analyst Mark Hughe sees Brown & Brown as a solid choice for investors of interest in the insurance industry.
“The company is generating solid organic sales growth, margins should be stable this year and mergers and acquisitions were healthy, all of which should lead to solid sales and bottom line growth in the coming periods. We believe that BRO stocks remain a good way for investors to gain exposure to the recovering economy and strengthening P&C prices, ”said Hughes.
In keeping with his optimistic approach, Hughes BRO assesses a buy, and his $ 55 price target indicates confidence in ~ 25% growth for the next 12 months.
Does the rest of the street agree? It turns out that analyst consensus is more of a mixed bag. Split almost exactly in the middle, 4 Buy ratings and 5 Holds were awarded in the past three months, earning BRO Moderate Buy status. With an average price target of $ 51.44, the 12-month potential profit is 17%. (See BRO stock analysis)
Visit Investing Insights for more ideas for stocks that trade at attractive valuations.
