These top two stocks have even more upside potential ahead of them.

Markets may have started the year generally upbeat, but they’ve been zigzagging lately, making it even harder to know which direction stocks are heading next.

This makes stock selection even more difficult than usual, but there is a tool here that can come in handy. The TipRanks Smart Score algorithm collects all the data needed to select stocks and sorts them into 8 factors, all of which are known to be consistent with future performance. These elements are then reduced to a single score from 1 to 10, where 10 naturally represents stocks that meet all the required parameters and are expected to move forward.

Using the Smart Score tool, we found two stocks that currently have a Perfect 10 rating. Both companies have already seen solid gains over the past few months, but Street analysts believe these strongly bought stocks have more upside potential. Let’s see why.

Deckers Outdoor (DECK)

Topping our Perfect 10 list is Decker Outdoor, a global footwear company that boasts a portfolio of leading brands; these include UGG, which sells premium footwear, apparel and accessories; Sanuk has casual shoes and sandals, just like Teva; the Hoka brand offers sports shoes, and casual shoes Fashion is represented by Koolaburra. Most of the products are sold in bulk, but the company also has a growing direct-to-consumer segment.

Earlier this month, Deckers released results for its fiscal third quarter 2023 (December quarter). Revenue rose 13.4% year-on-year to $1.35 billion, beating Street’s forecast by $90 million. The company also beat expectations on net income, delivering earnings per share of $10.48, above the consensus estimate of $9.52. Moving forward, Deckers expects annual sales to be between $3.50 billion and $3.53 billion; the consensus was $3.53 billion.

Turning to Smart Score, we find that DECK works on all cylinders. Hedge funds added 130,100 shares in their holdings last quarter, while stocks are capturing both bullish blogger sentiment and news sentiment. Fundamentally, the stock has delivered a 30% return on equity over the last 12 months.

While markets weren’t overly impressed with the latest results, it should be noted that the stock has gained 83% since bottoming out in May.

Covering this stock for BTIG, Janine Stichter lays out a bullish scenario. She writes: “In the current environment, we believe that strong brands will work best and fit perfectly into the DECK portfolio. UGG’s continued performance and resonance among younger consumers should contribute to strong and sustainable growth, while we see HOKA continue its robust growth rate in the coming years. Operating margins, which are already best in class, have room to grow as cross traffic flows weaken, and high profitability and the ability to reinvest for growth are a competitive advantage.”

Accordingly, the analyst assumed coverage with a Buy recommendation along with a $515 target price. Consequences for investors? Upside potential 24% from current levels.

Over the past 3 months, 11 analysts have reviewed DECK’s outlook and the ratings have dropped from 9 to 2 in favor of “buy not hold” leading to a “strong buy” consensus. With an average target of $484.73, the stock is expected to rise 17% in the coming months. (See DECK share analysis on TipRanks)

Poseida Therapeutics, Inc. (PSTX)

The only thing that ties our next Perfect 10 promotion to the previous one is the score. The value proposition of Poseida Therapeutics is completely different: it is a clinical stage biotechnology aimed at developing new cellular and gene treatments for cancer and rare genetic diseases. This is achieved through proprietary platforms including piggyBac, Cas-CLOVER and nanoparticle technologies.

The company currently has two allogeneic chimeric antigenic T cell (CAR-T) candidates that have reached clinical trials. P-MUC1C-ALLO1 is indicated for the treatment of solid tumors and is currently in phase 1 clinical trials. In addition, P-BCMA-ALLO1 is also in Phase 1 trials for the treatment of relapsed and refractory (r/r) multiple myeloma (MM). This candidate is being evaluated in collaboration with Roche. In December, the company presented encouraging initial clinical data from both studies and intends to present further updates at this year’s medical meeting.

In terms of Smart Score, the Poseida Perfect 10 rankings are based on several strong metrics, including 100% blogger sentiment and positive activity from hedge funds — they added 750,000 stocks to their positions in the last quarter.

For Arthur Heh of HC Wainwright, Poseida’s positive prognosis is based on its potential to usher in a new era of cell and gene therapy.

“Despite the therapeutic success of current autologous CAR-T therapy, significant limitations remain, such as severe toxicity, limited efficacy in solid tumors, and high manufacturing cost, which pose challenges for widespread adoption of the treatment,” he wrote. “We believe that the Poseida piggyBac and Cas-CLOVER technologies have the potential to solve these problems… We believe that the Poseida platforms have the potential to change the landscape of both cell and gene therapy. We currently forecast the company’s risk-adjusted revenue to be $1.3 billion in 2033, up from $56 million in 2027.”

Since falling in May last year, PSTX shares have plummeted, gaining 302%. But He thinks there’s more gas in the tank; along with a Buy recommendation, its $15 price target provides a 99% additional profit opportunity. (To see his track record, Click here)

Other analysts also believe there is still plenty of room for growth; Street’s average target is $19.50, implying a 159% annualized return. Only those with a “Buy” rating – 3 in total – qualify for the “Strong Buy” consensus rating. (See PSTX share analysis at TipRanks)

For good stock trading ideas at an attractive price, visit TipRanks Best Stocks to Buy, a recently launched tool that aggregates all of TipRanks stock analytics.

Disclaimer: The views expressed in this article are solely those of a selected analyst. The content is for informational purposes only. It is very important to do your own analysis before making any investment.

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