Will the rally ever end?! Stocks continue to climb to record levels. Boosted by strong earnings and the promise of U.S.-China trade talks, the S&P 500 is now up over 20% year to date. That means upside potential can look limited from these lofty heights and finding stocks to buy seems a daunting task.
But there are still some select stocks out there primed to move higher. If you’re looking for a quick boost to your portfolio, look no further. These are 7 stellar stock picks — and I will explain why.
First of all each of these stocks has over 20% upside potential. This is from the current share price to the average analyst price target. (And some of these stocks have far more than 20% upside potential.) Secondly, all these are “Buy” rated-stocks according to Street consensus — or all the stock’s ratings for the last three months. And last but not least, when you see the analyst investor reports on these stocks, it’s clear that these are very promising companies with serious growth to come.
I found these stocks using TipRanks’ stock screener. This nifty screener enables you to search for stocks with a bullish rating from the Street’s best analysts. Plus you can screen for only stocks with 20% upside potential and above. So see what you think of the following 7 stocks to buy now:
Stocks to Buy: Stitch Fix (SFIX)
Stitch Fix (NASDAQ:SFIX) shares enjoyed an incredible run at the start of the year. Shares are currently trading up 54% year-to-date. However it’s not all smooth sailing — the online personal shopping service has lost 14% in the last month. That’s due to decelerating active client growth from 31% YoY as of July 2017 to 17% YoY as of April 2019.
Luckily analysts are not concerned. In fact, it’s quite the opposite. The stock has just received two back-to-back upgrades from the Street.
“Shares are now ~23% below our target price and trading at 1.3x CY:20 sales (below the historical average). Given our increasing confidence in the management team’s ability to drive continued ARPU growth and healthy net client growth, we believe the recent weakness offers an attractive entry point” cheers five-star Stifel Nicolaus analyst Scott Devitt.
He has just upgraded FIX from “hold” to “buy,” with a price target of $35 (27% upside potential). Similarly Goldman Sachs’ Heath Terry also upgraded FIX, with a $38 price target (38% upside potential). According to Terry, FIX shows “compelling upside potential” thanks to its expansion into plus-size, kids’, and men’s clothing. Terry is also optimistic about the company’s recent move into the UK.
Terry — who also has a five-star track record — tells investors: “We believe product innovation, operational efficiencies, and geographic expansion, combined with the increase in retail store closures (particularly in apparel) represent significant opportunities for further outperformance.” Interested in Stitch Fix stock?
Syndax Pharmaceuticals (SNDX)
Syndax Pharmaceuticals (NASDAQ:SNDX) has a strong purpose. The company wants to create a future where people with cancer live longer and better than ever before. And it is certainly making progress in realizing this goal. The company has just announced that the IND (investigational new drug application) for its targeted Menin inhibitor, SNDX-5613, has been cleared by the FDA.
Syndax will now run will run a Phase 1/2 open-label trial in patients with r/r leukemia. Top-rated Nomura analyst Christopher Marai argues that the drug has the potential to be a blockbuster i.e. an extremely popular drug delivering annual sales of over $1 billion.
He has just reiterated his SNDX buy rating with a $16 price target (78% upside potential). The analyst is confident that data is possible by the end of this year, writing: “We believe that the menin inhibition approach has potential for rapid POC (proof of concept) data, possibly by ASH (YE19).”
He concludes “The program could become a blockbuster opportunity.” Note that shares have already doubled year-to-date. But according to the Street significant further growth lies ahead. The average analyst price target of $19 indicates upside potential of 115%.
Morgan Stanley (MS)
Morgan Stanley (NYSE:MS) has only buy ratings from the Street right now. The company just reported stellar earnings for the second quarter against a choppy operating backdrop. Meanwhile the average analyst price target of $60 suggests shares can surge over 30% in the coming months.
Revenue of $10.24 billion exceeded consensus estimate by around $250 million. Likewise EPS of $1.23 crushed the expected $1.14 consensus estimate. The beat came from strong results in both the firm’s wealth management and investment management divisions.
Morgan Stanley’s CFO Jonathan Pruzan revealed that rising markets helped in “both the wealth business, in terms of the assets we manage, as well as our investment management business.”
I am also encouraged by a recent upgrade from Citigroup analyst Keith Horowitz. He boosted his price target from $48 to $52, citing an opportunity to increase exposure to a high quality franchise with limited rates exposure.
“We see Morgan Stanley net income growth of 2-3% over the next two years by continuing to gain market share in both its institutional and retail franchises, which compares more favorably against the flat to slightly declining net income growth among the rest of the bank universe” the analyst told investors. Shares are currently up 15% year-to-date.
The RealReal (REAL)
Welcome to a brand-new investing opportunity. This is a stock I am keeping a close eye on right now. Luxury resale website The RealReal (NASDAQ:REAL) has just made a dazzling market debut with a $300 million IPO. Despite pricing shares above the expected $17-$19 range at $20, the stock opened for trading at $28.90, up 44.5%.
“We see a strong opportunity for The RealReal to be a dominant player in the luxury resale space” cheers Stifel Nicolaus analyst Scott Devitt. He is one of six analysts who have just initiated coverage on REAL. Four analysts started the stock at buy with two staying sidelined. Their $30.20 average price target translates into 20% upside potential.
Devitt believes that REAL provides a “superior marketplace experience.” Crucially there is a rigorous authentication process to ensure genuine luxury items. As the company stated in its IPO filing: “Trust is the cornerstone of our online marketplace… We believe the trust and personal relationships that we have built with both consignors and buyers over the past eight years cannot be easily replicated.”
What’s more Devitt notes that the secondhand personal luxury goods market is growing over 2x faster than the primary market. In addition, there is an estimated $198 billion in luxury goods potentially available for sale in U.S. homes. “As more individuals become comfortable buying and selling pre-owned goods, there is a strong opportunity to unlock supply supporting long-term growth” states the analyst.
With strong revenue growth of 35% CAGR over the next three years, the analyst expects the company to break even in 2022.
Should you buy Netflix (NASDASQ:NFLX) right now? There is no escaping the fact that Netflix disappointed with its Q2 earning results. Shockingly weak Q2 subscriber additions numbers sent shares plunging 16%. However I would argue that now is the time to buy rather than sell. And this is a message backed by the Street, which has a “strong buy” NFLX stock consensus.
One analyst sticking by his bullish call is Monness’ Brian White. Out of over 5,000 tracked analysts, White is ranked No. 9 for his strong stock picking skills. Plus his NFLX price target is even higher than average at $440 (43% upside potential). The $412 average analyst price target indicates 24% upside potential.
“We expect this noise will prove to be a fleeting issue and reiterate our BUY rating” cheered White. “Netflix reported a big 2Q:19 paid streaming net additions miss but served up a healthy 3Q:19 outlook.”
SunTrust Robinson analyst Matthew Thornton calls the 3Q content slate “easily the most robust to date.” Notably “Stranger Things” Season 3 had a whopping 40.7 million accounts watching in the first four days, According to a Tweet from Netflix. That’s “more than any other film or series in its first four days.” Thornton also cites hits like La Casa de Papel (No. 1 Spanish language show), Sacred Games (No. 1 Indian show) and new content from Ryan Murphy and the Obamas.
OrganiGram Holdings (NASDAQ:OGI) is a top-notch cannabis stock. Canada’s OGI is a leading original licensed producer of medical cannabis. The company sells both organic and non-organic strains of cannabis, as well as vaporizers and cannabis oils. And it’s trading at just around eight times next year’s sales, one of the cheapest valuations compared to immediate peers.
Even though OGI’s fiscal Q3 earnings report missed expectations, its bull picture is firmly intact. CEO Greg Engel blames a failed cloning experiment for a temporary drop in plant yield. He reassured investors: “Not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4.”
Looking ahead, the Canadian market is ready to grow significantly, says Engel. That’s with more retail stores opening — particularly in Ontario and Quebec — as well as the upcoming legalization and availability of edibles and derivative products.
Shares are still up 70% year-to-date, while all analysts covering OGI rate the stock a buy. With an average price target of C$12, these analysts see juicy upside potential of 53%.
“Organigram is quickly separating itself from other Canadian LPs,” enthuses Paradigm analyst Corey Hammill. “It is a low-cost producer, has an established nationwide distribution network and has invested in preparing for Canada’s next wave of legalization.” So watch this space.
Last but by no means least, we have gene-therapy stock Uniqure NV (NASDAQ:QURE). The company has put on a remarkable sprint recently, nearly doubling in the last six months. That’s thanks to its ongoing clinical program in hemophilia B, a blood clotting disorder caused by inherited gene mutation.
Earlier this month, uniQure presented nine-month data from the Phase 2b trial of AMT-061 in hemophilia B at the ISTH Congress. Following the event, Cantor Fitzgerald’s Elemer Piros hiked his price target from $81 to $94 (37% upside potential).
“We remain optimistic that uniQure has the best-in-class hemophilia B gene therapy product and will report positive results from the ongoing Phase 3 HOPE-B study (we have restructured our payment model and increased the PoS [probability of success] to 90% from 75%)” Piros revealed.
“Although the stock has performed +163% YTD vs. +22% for the XBI, we think new interest could emerge from uniQure’s pipeline beyond hemophilia B this year (we are newly including a Huntington’s disease model)” the analyst added. Indeed uniQure has guided toward initiating a Phase 1/2 study for Huntington’s during 2H19. Putting everything together, he expects uniQure to surpass $1 billion in revenue in 2025.