In a financial environment riddled with unprecedented levels of uncertainty, investors are desperate. When it comes to finding an investment strategy that delivers returns, traditional methods may not be as reliable. So, how should investors get out of the rut?
In times like these, more comprehensive stock analysis can steer investors toward 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 Smart Score measures six key metrics, including analysts, bloggers and news sentiment, as well as hedge fund and business insider activity. After analyzing each statistic, a single numeric 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 earned a "Perfect 10" Smart Score. Here are three to consider.
Brunswick Corporation ( )
Brunswick (NYSE 🙂 is a pleasure craft manufacturer that builds and markets boats, marine engines and their parts and accessories. Brunswick owns several of the leading brands in its segment, including Boston Whaler, Mercury and SeaRay.
Boating is a leisure activity that lends itself to social distance measures, and for those with access, it was popular during the & # 39; corona summer & # 39 ;. Brunswick's financial results show that – the company has made modest sequential gains in revenues through 2020 so far, with second quarter results of $ 987 million at the top and 99 cents EPS at the bottom. The EPS result was more than double the forecast. The earnings outlook for the third quarter, reported at the end of this month, is $ 1.31 EPS.
With that as a backdrop, it should come as no surprise that the company has kept its dividend high. The payment, 24 cents per common share, returns a modest 1.5%, but the important point here is that BC had increased its dividend through 2020 and stuck with the higher payout during the crisis.
Raymond James analyst Joseph Altobello likes Brunswick's current retail environment. He writes, “Retail trends remained very strong in July and August, amid unprecedented demand for boats … while demand was also strong among existing boaters, the lack of inventory could delay some upgrades until next year, raising the challenge. offset year-over-year comparisons during late spring and summer. "
Altobello is reviewing Outperform stock (i.e. a buy), and his company's $ 79 target price indicates a 25% increase for the coming year.
Brunswick gets a strong buy from analyst consensus showing Wall Street agrees with Altobello's bullish take. The recent reviews are broken down into 9 purchases and only 2 holds. The stock is priced at $ 62.11, and the average target of $ 79 is in line with Raymond James. (See Brunswick inventory analysis)
Guidewire Software ( GWRE )
This California-based software company offers subscription services: BillingCenter, ClaimsCenter, and PolicyCenter in the property and casualty insurance industry. It is a specialized niche, for which Guidewire (NYSE 🙂 developed its own programming language, Gosu, which was later released as open source.
Most people have insurance; it is a product that exists to protect our money, and we all have a vested interest in that. Guidewire's results have reflected that. The company posted losses in the fourth quarter of 2019 and the first two quarters of this year, but Q4 through Q2 are normally the slowest of GWRE. Revenues and revenues are increasing in Q3 – and in Q3 CY20, Guidewire blew away the earnings forecast, with earnings per share of 56 cents at an estimate of 20 cents, and revenue of $ 243 million.
Among the fans is Needham analyst Mayank Tandon, who ranks high with a # 97 position among 7,000 Wall Street analysts. He writes about Guidewire: “GWRE remains one of the foremost providers of cloud-based core software solutions for P&C carriers. We believe the market is large, healthy and in the early days of a long transition to cloud-based solutions from legacy legacy solutions. We expect the revenue / margin trajectory to be smoother as management executes the model transition. "
The five-star analyst rates this stock as a buy, and his $ 130 price target suggests there is room for 26% growth over the next 12 months.
Overall, Guidewire is rated as a moderate buy based on analyst consensus, with 4 purchases recently and 2 holds. The stock is not cheap, priced at $ 103.39, and its average target price of $ 134 is slightly higher than Tandon's; it implies a 30% upside potential. (See GWRE Inventory Analysis)
LPL Financial Holdings ( LPLA )
Last on our list of Perfect 10's is LPL Financial Holdings Inc (NASDAQ :), the largest independent broker-dealer in the US. The company was created through a merger in 1989 and has since built a reputation for generating profit and returns. LPL Financial sees more than $ 5 billion in annual revenue. The services offered include financial advice, retail brokerage and access to the universe of financial products.
However, the general downturn has left customers squeezing their money. While LPL posted big gains in the first quarter of this year, the second quarter saw consecutive losses. Revenues fell from $ 546 million to $ 461 million, and earnings per share fell from $ 2.06 to $ 1.42.
On one important point, however, LPL continued to maintain its dividend. As with Brunswick above, the payout and returns are both modest – the key is that the company saw no reason to cut as well and it remains able to cover the payout at the current income level. The dividend pays out 25 cents per quarter, with a return of 1.2%.
Five-star analyst Steven Chubak, of Wolfe Research, writes of LPL, “[We] believes that strong organic growth at a reasonable valuation is one of the best themes in an uncertain macro environment. As long as LPLA can be executed consistently and deliver sustained organic growth momentum, it should continue to attract interest from a broader investor base, supporting its continued outperformance. "
Chubak's assessment of overweight (i.e. buying) is supported here by his price target of $ 100, which is a 22% increase for one year.
This is another stock with an average buy rating by analyst consensus. LPLA has 5 recent Buys and 2 Holds from the Wall Street analyst corps. The stock is priced at $ 82.90 and has an average target of $ 98.71, slightly lower than Chubak's and pointing to a 19% rise for the coming year. (See LPLA Stock Analysis)
For more ideas for stocks that trade at attractive valuations, visit Investing Insights.
