In a financial environment full of unprecedented levels of uncertainty, investors are at their wits' end. 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, a more comprehensive stock analysis can steer investors in the direction of returns. 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 analyst ratings, blogger opinions, and news sentiment, as well as hedge fund, corporate insider, and investor activity. After analyzing each statistic, a single numerical score is generated, with 10 being the best possible result.
With this in mind, we searched the database and filtered the results to show only those names that have earned a "Perfect 10" Smart Score and have a two-digit upside potential. Here are three for consideration.
CommScope Holding (COMM)
We start with CommScope Holding (NASDAQ:). This company has a clear path to 5G – its main products are network infrastructure hardware. CommScope manufactures antennas used in tower and building installations, base stations for network transmitters and wireless outdoor power supplies. These products are manufactured and marketed by subsidiaries; CommScope is the holding company that links them together.
The connection to 5G is obvious; the new networks require a huge array of new hardware in the buildout, a buildout that is already underway and gaining momentum – and CommScope is already positioned to participate. The company already manufactures and sells a range of products for 5G-enabled hardware.
Earlier this month, CommScope released its second quarter earnings report. The report showed modest revenue growth of 4% yoy to $2.19 billion. The net loss per share, 82 cents, was much better than the loss of $1.71 per share reported in the same quarter a year ago.
However, headwinds in the supply chain cause the company to be cautious about the outlook for 2H EBITDA and FCF relative to 2H20. These headwinds terrified investors and are likely responsible for the massive sell-off that followed the earnings announcement.
Credit Suisse analyst Sami Badri, however, remains unbothered by the cries of supply chain restrictions. Badri rates COMM as an outperform (i.e., buy), and his price target of $23 suggests room for a ~55% gain this year.
"… company remains well positioned for 5G densification efforts by telcos, network expansions with cable companies, building data centers with clouds/multi-tenant data centers and RDOF… Given COMMs Product indexing on strong end-market trends, including 5G, RDOF, digital infrastructure growth and cable network densification, we continue to identify COMM as a major thematic beneficiary of these themes and at an attractive valuation," Badri said.
Overall, this is a stock with a strong buy consensus rating, based on 6 ratings, including 5 to buy and 1 to hold. CommScope has an average price target of $24.40, representing ~65% share growth over the next 12 months. (See COMM inventory analysis)
Dish Network (DISH )
This Colorado-based technology company is a leader in Direct TV, offering its customers television services through satellite broadcasts. In addition, Dish Network (NASDAQ:) has also entered the prepaid wireless mobile niche, acquiring Boost Mobile last year, integrating the wireless company's 8.89 million customers.
Dish has a strong presence in wireless connectivity, in addition to its satellite TV service, it acquired Boost as part of a 2019 deal with Sprint, giving Dish Sprint's prepaid wireless service. The company is also a mobile virtual network operator at AT&T. Dish is building its own 5G network as part of its Dish Wireless services. Dish currently has 8.9 million wireless subscribers.
In its recent financial report, Dish reported results for the first half of 2021. The company posted revenues of $8.98 billion for the first six months of the year, a significant increase from $6.4 billion. billion reported in the first half of 2020. income was $1.3 billion, which compares favorably with $525 million in the same period of 2020. Dish's six-month earnings per share were $2.05, more than double the 90 cents per share recorded a year earlier. was reported.
Deutsche Bank analyst Brian Kraft covers Dish and sees the company's move to 5G service as a net asset. Kraft writes, “DISH's 5G network capex is starting to rise, reaching $200 million this quarter, and the company noted that its investment in wireless networks will 'increase significantly through the remainder of 2021', and also adds that the agreement with AT&T "DISH in the medium to long term to focus its network investment dollars on the highest return opportunities, including dense urban markets and the 5G enterprise opportunities, while relying on its MVNO partner for coverage in smaller and rural markets…”
Kraft rates DISH as a buy, with a price target of $77, which represents an 80% increase for the coming year.
Overall, DISH has an average buy rating from the analyst consensus, based on 6 buy, 4 hold and 1 sell in the past few weeks. The stock is selling for $42.70 and the average price target of $52.55 suggests there is room for 23% growth over the next 12 months. (See DISH stock analysis)
ConnectOne Bancorp (CNOB)
Let's turn to the financial industry, specifically ConnectOne Bancorp (NASDAQ:), a bank holding company with operations in upstate New York and New Jersey. The company's banking subsidiary, ConnectOne Bank, has 26 locations serving retail and corporate customers with a full range of banking services.
The company's total assets were reported for the second quarter as $7.7 billion, an increase of $162.7 million (or 2%) as of the end of 2020. Loans receivable represent $6.4 billion of that total. Earnings per share for the second quarter were 81 cents, one cent less than the 82 cents reported in the first quarter, while revenue grew 3% sequentially to reach $77.5 million. The company announced a dividend of 11 cents per common share, payable September 1. At $0.44 on an annualized basis, it gives a return of 1.5%.
The stock is up 94% in the past year, but would you believe it could rise another 35%? William Wallace of Raymond James does. The analyst rates CNOB as a strong buy, along with a price target of $40.
“We are optimistic that loan growth above peers is likely to continue for what we believe to be one of the more dynamic banks in the market. Additionally, fee income (while still only ~6% of total revenue) remains relatively strong… with stocks trading on a P/E basis at a sharp discount to peers, we continue to believe that the risk/reward dynamics are very favorable given the company's strong growth and profitability profiles relative to the industry," noted Wallace.
Although ConnectOne has only received 3 recent stock reviews, they agree with Wallace – making the Strong Buy consensus rating for the stock unanimous. The stock is priced at $29.46 and the average price target of $35.67 points to a 21% increase from that level in the coming months. (See CNOB Inventory Analysis)
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