The market is currently trading at record highs, boosted by the prospect of business-friendly tax reforms. According to JPMorgan quant guru Marko Kolanovic, a successful Republican tax overhaul will give equities a huge boost in 2018. “The upcoming reduction of US corporate tax rates may be one of the biggest positive catalysts for US equities this cycle,” says Kolanovic.
Bearing this in mind, we used TipRanks’ Top Stocks tool to see which ‘Strong Buy’ stocks are primed for a particularly strong performance. Top recommended stocks are based on a TipRanks developed formula, factoring in ratings made by the best performing analysts.
Crucially we sorted the stocks by upside potential to find stocks primed for growth.
The result: 10 top stocks with big support from the Street’s best analysts. These are the analysts that consistently crush the market. Here we look at the second set of these top stocks (for the first 5 click here):
1. Madrigal Pharmaceuticals Inc (NASDAQ:MDGL)
On December 5, Madrigal shares exploded from $46 to $87. Indeed, we can see from the screenshot below that the stock has climbed over 300% in the last three months. Luckily for investors, top analysts are confident that the stock still has serious growth potential ahead. With four buy ratings in the last two weeks, analysts believe MDGL can hit $135 (63% upside potential).
Madrigal has just released positive data from its phase II clinical trials for its lead NASH compound, MGL-3196. Roth Capital’s Yasmeen Rahimi called the interim results ‘remarkably positive.’ She says the company’s efficacy results are “by far the best” relative to its peers. As a result, Rahimi ramped up her MDGL price target from $82 all the way to $170. This translates into upside potential of over 100%.
Studies show that NASH, a chronic liver disease, affects approximately 15 million Americans. It can cause liver failure or cancer if left untreated. Some experts even predict it could become the leading cause of liver transplants by the next decade, creating a $35 billion market for NASH-targeted medicines. Note that you can click on the Top Stocks screenshot below for further stock insights.
2. Varonis Systems (NASDAQ:VRNS)
Cybersecurity stock Varonis provides software solutions to protect data from insider threats and cyberattacks. “Attackers are upping their game, using more sophisticated, blended attacks like WannaCry and NotPetya that make use of multiple attack vectors,” says Varonis CMO David Gibson. “At the same time, valuable data remains vulnerable to attacks that require little to no sophistication, like disgruntled employees snooping through overly accessible folders.”
Perhaps this explains the company’s Strong Buy analyst consensus rating (four top analyst buy ratings in three months). Meanwhile the $54 average analyst price target indicates almost 12% upside potential from the current share price. “We believe VRNS is capable of continuing its strong cadence riding the tailwinds of positive market trends” remarks top Oppenheimer analyst Shaul Eyal. He believes that VRNS’ market opportunity remains largely untapped- hence his $57 price target (19% upside).
3. IMAX Corp (NYSE:IMAX)
Top B Riley analyst Eric Wold is eagerly anticipating how theater company IMAX stands to benefit from Star Wars: The Last Jedi. He believes the movie can push IMAX’s 4Q17 global box office into the $310 million- $315 million range, easily beating consensus of $270 million-$280 million.
“Although movie-goer response to a film slate will always be somewhat uncertain (as was the case this past summer), we believe the upcoming film slate for 2018 is very reminiscent of the powerful slate experienced during 2015, which helped push IMAX per screen box office averages to multiyear highs” says Wold.
With that in mind, he recommends building/adding to positions in IMAX shares at current levels and especially ahead of the positive indicators that the new Star Wars film could provide. The four-star analyst has a $35 price target on IMAX indicating big upside potential of 43%.
Wold isn’t alone in his bullish take on IMAX. Four top analysts have published buy ratings IMAX over the last three months, including two rating upgrades.
4. Peak Resorts Inc (NASDAQ:SKIS)
Missouri-based SKIS is a “Strong Buy” cheap stock to track right now. SKIS owns and operates 12 ski resorts across the Midwest and Northeast U.S. In the last five days, three top analysts have published buy ratings on SKIS. The average target price of these analysts: $6.67 — about 30% above the current share price.
“At Mount Snow, Peak’s largest resort, skier visits jumped 70% YOY over Thanksgiving weekend” points out top B Riley analyst Barton Crockett. He notes that SKIS is trading far below peers and says, “We find the valuation disparity and Peak’s dominant position the NYC metro and Ohio drive-to-ski regions enticing at a time of snowballing (pun intended) consolidation in the ski industry.”
5. Amazon (NASDAQ:AMZN)
Five-star RBC Capital analyst Mark Mahaney calls Amazon one of his three Top Large Cap Longs for 2018. ‘Of the Large Cap Nets, AMZN stands the most to benefit from the Top Ten Themes we have identified for 2018’ explains Mahaney. These themes include more mobile; artificial intelligence; video; speedy delivery; cloud computing; voice activation and M&A activity. Plus AMZN ‘may have the strongest long-term growth outlook among the Internet Staples, as it faces the largest Total Addressable Markets.’
In the last three months AMZN has scored no less than 34 buy ratings vs just 1 hold rating. And increasingly analysts are getting used to the idea that AMZN can reach $1,500 in the next 12 months. Take John Blackledge of Cowen & Co who has just increased his price target to $1,500, while Wells Fargo’s Ken Sena has the stock’s highest price target of $1,525 (29% upside).
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