Markets have been rising in recent weeks, bolstered by the prospect of less confrontational politics. In fact, the COVID-19 vaccination program continues. There is real hope that a return to normal will take place in the short term by 2021. To prepare for this, Wall Street analysts have scoured the markets to find the stocks that are ready for profit with the big change in our collective assets.
With this in mind, we have created a profile that describes the stocks recommended by a number of five-star analysts. These are buy-rated, double-digit stocks, but according to these analysts, they have significantly higher upside potential than consensus allows. And as a better sign to investors, these three stocks are rated "Perfect 10" by the Investing Insights platform.
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 over-performance; when matched, this is a strong indication for buyers to consider. Here are the details of three stocks to keep an eye out for.
SS&C Technologies ( SSNC )
SS&C Technologies (NASDAQ :), based in the state of Connecticut, is a global software company offering a range of SaaS products for the financial industry. SS & C's products help with real estate and asset management, investor services and fund administration, along with business process management, customer communication and risk & compliance. The company has a history of growth through acquisition, most recently making its most recent move in late 2019 when it spent $ 88.8 million acquiring Algorithmics from IBM.
The value of cloud-based financial management software is evident in today's environment and SS&C has clearly benefited from it. The company's stock value fell sharply last winter, at the height of the corona panic, during the brief February / March recession – but since then the stock has rebounded and is now trading just above pre-collapse levels. Revenues have remained stable until 2020; third quarter earnings of $ 1.15 billion are slightly above the third quarter 2019 figure.
About this stock for BTIG, five-star analyst Mark Palmer writes, “Although SSNC's share has more than doubled from the pandemic-induced COVID-19 lows they hit last March, we still think the stock is. .. especially when compared to the shares of other software-focused FinTech companies with significant recurring income … We believe the cheap valuation SSNC is trading at is due to investors' focus on the company's low organic growth … "
To go into detail, Palmer looks beyond the obvious and gives a brief overview of the company's long-term strategic vision: “[When] we look at SSNC, we see a company that uses cheap debt to achieve goals. with a great deal of recurring revenue in their mixes and make them more profitable by reducing costs and increasing margins; it has done this by acquiring 50 companies over the more than three decades since its inception. The result is a strong track record of adjusted EPS growth, including 31.2% in 2019 and a run rate of 10.7% during the first three quarters of 2020 amid a global pandemic. "
Based on those comments, Palmer considers the stock to be a buy. His price target of $ 85 points to 28% growth for the coming year.
With 12 recent reviews on file, split into 9 Buys and 3 Holds, SSNC receives a Strong Buy rating from analyst consensus. The stock is selling for $ 66.46 and the average target of $ 76.64 suggests a 15% upside potential over a year. (See SSNC Stock Analysis)
Infosys Limited ( ] INFY )
The next step is Infosys (NYSE :), India's second largest IT company. The Bangalore-based company brought in $ 13 billion in revenue for fiscal year 2020. At the close of the calendar year, Infosys reported $ 3.5 billion, an increase of 6.6% year-over-year. Sequential profit of 5.3% was the highest quarter-on-quarter growth in 8 years.
This growth is fueled by a range of services and products, including business consultancy, digital market, technical services and information technology. Infosys has more than 1,500 client companies in 46 countries and its outsourcing services are in high demand. The stock's value is up 69% in the last 12 months, much faster than the total markets.
Moshe Katri, five-star analyst at Wedbush, writes to Infosys, “[We] believes the company has posted record bookings of 6-12 months (most of new logos), as well as leveraging the margin of the pandemic-driven WFH (accelerated offshoring mix) model, will collectively drive an acceleration of FY22 sales growth, as well as an upward reset of INFY & # 39; s long-term margin structure … "
Seeing that the company is well positioned to consolidate its earnings going forward, he raises its price target to $ 25 in line with its Outperform (i.e. Buy) rating. At the current level, Katri & # 39; s target implies a 37% increase in one year.
This one gets an average buy price from the analysts' consensus rating, based on 9 reviews split into 4 purchases and 5 held. The stock is trading at $ 18.02. Their average price target of $ 20.75 suggests they will grow 15% in 2021. (See INFI Stock Analysis)
NCR Corporation ( NCR ) ]
The last stock on this list is a household name, almost as well known as IBM. NCR (NYSE 🙂 began building cash registers in the 1880s and has since been in the business machinery niche, adapting as the industry shifted from mechanical devices to modern software. Today, NCR produces a range of business software and payment processing systems, as well as machines – which line-up includes ATMs, barcode scanners, POS terminals and self-service kiosks. The relevance of business machines to the modern world is reflected in the company's total revenues; in 2019, the last year of full-year figures available, NCR brought in $ 6.92 billion at the top.
Currently, the company's revenues are still slightly depressed by the impact of COVID-19. In 3Q20, sales fell 10% year-over-year to $ 1.59 billion, although earnings per share at 19 cents per share were more than double a year ago of 8 cents. The stock has recovered from last winter's corona recession and is now trading 6.2% above its pre-corona value.
Earlier this month, NCR announced that it is in negotiations to acquire Cardtronics (NASDAQ :), an ATM operator. The deal is valued at $ 1.7 billion and will bring a global network of 285,000 ATMs under the NCR umbrella.
In his note on this stock, RBC analyst Daniel Perlin points out the benefits of the Cardtronics acquisition: “At a high level, we believe that the transaction provides NCR… significant benefits, including: 1) improving NCR & # 39; s ATM “as a service” ”Solution for banks and fintechs; 2) Providing additional opportunities for transaction monetization and cross-selling by combining CATM's network and NCR's addressable markets of both financial companies and retailers … "
To summarize his position on NCR, Perlin describes his “increased confidence in our belief that NCR is back on the forefront, moving into a growth mode and in a [sound] position, both strategically and financially … "
Perlin is evaluating the stock Outperform (buy), and his price target of $ 47 suggests 38% growth for the next 12 months.
Strong Buy analysts' consensus rating on NCR is unanimous, based on 6 recent Buy-side reviews. The average price target, $ 43.60, indicates a path to 30% above the current trading price of $ 33.43. (See NCR stock analysis)
Visit Investing Insights for more ideas for stocks that trade at attractive valuations.
