All these stocks are up over 10% or more in the last month.
We are now heading into Q4 with much stronger momentum than many expected. Indeed, for the S&P 500, the third quarter of 2018 marked the best quarterly gain since Q4 2013. And Q4 is seasonally much stronger than the often choppy Q3. So which stocks are gearing up for a strong end-of-year flourish- and even better, a strong 2019?
Here we take a closer look at five stocks which are all up over 10% in the last month. These five ‘Strong Buy’ stocks show big promise for the months ahead. Let’s take a closer look why analysts are so bullish on these stock picks now. Note that- using TipRanks analytics- all the consensus outlooks are based only on recent ratings from top-performing analysts:
1. Concho Resources (CXO)
Up 16% in last month
This is a core Permian Basin large cap with a strong track record of execution.
Williams Capital analyst Gabriele Sorbara (Track Record & Ratings) highlights Concho Resources as a ‘Top Pick.’
“We believe CXO is positioning for an even better 2019+ with continued execution and further differentiation from its peers with strong oil growth and FCF generation” comments Sorbara.
Specifically, large infrastructure spending in 2H18 should allow for large-scale development and acceleration of the RSPP assets in 2019 and 2020. As a result, the Williams Capital analyst reaffirms his buy rating with a bullish $189 price target.
Net-net: “In our view, CXO can be owned through the commodity cycle given its strong management team and large, premium quality acreage/inventory that generates consistency year after year as proven by its track record. Thus, its shares should continue to be awarded a premium valuation.”
See here how the stock has 100% Street support with a $189 average price target:
2. Cigna Corp (CI)
Up 14% in last month
US health insurance stock Cigna has only Buy ratings from the Street right now.
Top 25 analyst Steven Halper (Track Record & Ratings) spies a compelling risk/reward ratio in Cigna. The Cantor Fitzgerald analyst has just initiated coverage of Cigna with a $245 price target (16% upside potential) writing: “An attractive franchise gets more attractive.”
He sees multiple benefits from the company’s recent $54 billion acquisition of Express Scripts, a large pharmacy benefit manager (PBM).
“In addition to its core franchise in the self-insured market, the company should see strong benefits from the pending acquisition of Express Scripts” he explains. “We believe the transaction, which should close by year-end 2018, is a logical fit, both strategically and financially, with natural synergies.”
Plus keep a close eye on the company’s growing Medicare and Medicaid businesses. Unlike its peers, CI only has a small presence in Medicare and an even-smaller presence in Medicaid- which means that big growth opportunities lie ahead.
3. Alexion Pharmaceuticals (ALXN)
Up 15% in last month
Alexion is a ‘Strong Buy’ US pharma best known for its development of Soliris. The drug is already used to treat rare blood disorders and is now expanding into other indications.
Most notably, the company just released Soliris trial data for the treatment of NMO- a rare relapsing autoimmune disorder. The results far exceeded expectations, prompting a wave of Buy ratings and price target raises. Indeed Citi analyst Robyn Karnauskas (Track Record & Ratings) now models 2025 NMO sales of $1.3B with a price target of $195 (43% upside potential).
“NMO data comes as relatively unexpected upside adding another potentially large market & growth opportunity for Soliris & +$4/sh to our PT” comments RBC analyst Kennen MacKay (Track Record & Ratings). As a result, he now sees shares surging 25% to $170.
The RBC analyst added: “While Soliris expansion does not help skeptics of “pipeline in a product” structure we continue to see ALXN as one of the Large-Cap Biotech companies with the highest growth potential through 2020.”
4. Boeing (BA)
Up 13% in last month
“Boeing remains our #1 pick for extended commercial cash upswing” cheers top Cowen & Co analyst Cai Rumohr (Track Record & Ratings). He is forecasting strong EPS/cash flow gains through 2021. Bear in mind that this top analyst has scored big time with his Boeing ratings so far (a 79% success rate and 36% average return per rating).
According to Rumohr, Boeing’s three recent military program wins (MQ-25, Huey Replacement, and T-X), have a combined program plan size of $24B.
“T-X will have a meaningful potential foreign market as well as opportunity for sale in a light attack role; and MQ-25 has potential for downstream ISR applications” the analyst states. He has a $445 price target on the stock (15% upside potential).
5. Netease (NTES)
Up 13% in last month
Chinese internet company NetEase has just received two telling upgrades from both CLSA and Jefferies. Netease is currently gearing up to release a Chinese-style collectible card game (CCG) Ancient Nocturne, based in the time of the Tang Dynasty.
CLSA analyst Man Ho (Track Record & Ratings) comments “The launch of Ancient Nocturne could be a near-term catalyst, but we urge investors to see past the volatile, unpredictable gaming cycle and recognize NetEase as a leading online gaming company which operates multiple long-lasting franchises.”
He continues: “Netease has a proven track record of creating good quality content, making it less vulnerable to tightened regulations and increasing competition.”
Meanwhile Jefferies’ Karen Chan (Track Record & Ratings) cites 1) a more favorable risk/reward as easier comps approach on mobile game 2) the launch of Ancient Nocturne and 3) the resumption of game license approval by YE 2018.
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