In a financial environment riddled with unprecedented levels of uncertainty, investors are at wits’ end. When it comes to finding an investment strategy that will yield returns, traditional methods might not be as dependable. So, how should investors get out of the rut?
In times like these, a more comprehensive stock analysis can steer investors in the direction of returns. Rather than looking solely at more conventional factors like fundamental or technical analyses, other metrics can play a key role in determining whether or not a particular stock is on a clear path forward.
Investing.com offers a tool that does exactly that. Its Investing Insights measures eight key metrics including fundamentals and technicals while also taking into account analyst, blogger and news sentiment as well as hedge fund and corporate insider activity. After analyzing each metric, a single numerical score is generated, with 10 being the best possible result.
Using the Investing Insights tool, we were able to pinpoint three promising stocks that score a 'perfect' Smart Score of 10. Let’s take a closer look.
Limelight NetworksLLNW, Inc. (LLNW)
Limelight Networks (NASDAQ:LLNW) is best known for being a content delivery network (CDN) service provider, with its solutions enabling organizations to deliver digital assets that are fast, reliable and secure. With the growth story set to get even better, it’s no wonder LLNW has scored fans out on the Street.
Among the bulls is Northland Capital analyst Michael Latimore. After hosting a call with the company’s management team, he told clients that he walked away even more positive on the stock. “LLNW is a company with improving growth rates, expanding margins, and top tier customers; and getting a little help via work-from-home. We believe management remains confident in growth patterns, especially given new customers coming on board, and a healthy additional tailwind via work-from-home,” the analyst commented.
To support his bullish thesis, Latimore highlights the fact that going forward into Q2 and Q3, new customer launches should drive significant sequential growth, more so in full year 2021 than full year 2020. Online gaming updates as well as new sports content could also help propel the stock forward.
Latimore added, “Traffic related to work-from-home peaked at the end of March, but LLNW is managing more traffic than ever on a daily basis… LLNW has perfected its platform for OTT video and is in every conversation among new meaningful OTT video and live event providers.”
As its top 20 customers, which account for 77% of revenue, are financially sound, the deal is sealed for Latimore. To this end, the five-star analyst left an Outperform rating and $8 price target on LLNW, implying 60% upside potential.
Do other analysts agree with Latimore? As it turns out, they do. With 100% Street support, or 4 Buy ratings to be exact, the message is clear: LLNW is a Strong Buy. At $7.50, the average price target is less aggressive than Latimore’s, but still suggests 50% upside potential. See the LLNW stock analysis.
Krystal BiotechKRYS, Inc. (KRYS)
Using its STAR-D platform, Krystal Biotech (NASDAQ:KRYS) develops and commercializes innovative therapies that target various dermatologic conditions. On the heels of its recent data release, some Wall Street pros believe that now is the time to snap up shares.
During the American Society of Gene & Cell Therapy (ASGCT) virtual meeting, the company presented positive in vitro preclinical data for replication-defective HSV-1-based gene therapy (GT), KB407, in cystic fibrosis (CF), the most common inherited genetic disorder in the U.S. Based on the update, the asset was able to infect small airway epithelial cells (SAECs) and generate a robust expression of functional, full-length human CFTR protein that properly traffics to the cell membrane.
Commenting on this result for Chardon Capital, five-star analyst Gbola Amusa stated, “This result suggests KB407 has overcome the issues of limited-capacity GT vectors not infecting the appropriate cells of the lungs.” He also pointed out that KB407 went head-to-head with Orkambi (G418) in relevant mutations, but also worked broadly on functional correction of the cystic phenotype of organoids.
Amusa added, “We thus see the KB407 in vitro data as a good start en route to Krystal testing KB407 for other issues that have held back GTs for CF, namely: (1) redosing (B-VEC data suggest Krystal’s vectors can be re-dosed), and (2) delivery (upcoming mouse nebulizer data will shed light).”
It should be noted that Vertex Pharmaceuticals (NASDAQ:VRTX) is already well positioned within the space, but Amusa argues that a therapy for the 10% of CF patients with class I mutations, which cause the most severe phenotypes, still isn’t available, leaving the door wide open for KRYS.
Based on all of the above, Amusa calls the stock a Top Pick for 2020. Along with a Buy rating, the $100 price target remains unchanged. This target puts the upside potential at 108%.
What does the rest of the Street think about Krystal Biotech’s long-term growth prospects? It turns out that other analysts also have high hopes. Only Buy ratings, 6, in fact, have been received in the last three months, so the consensus rating is a Strong Buy. In addition, the $81 average price target indicates 68% upside potential. See the KRYS stock analysis.
Celsius HoldingsCELH, Inc. (CELH)
Celsius Holdings (NASDAQ:CELH) offers a portfolio of fitness drinks under the flagship CELSIUS brand that provide healthy energy while accelerating the metabolism and burning body fat. Following its Q1 2020 earnings release, the analyst community is singing its praises.
On May 12, CELH reported revenue of $28.2 million, which flew past the Street’s $13.4 million call and reflected a whopping 94.6% year-over-year gain. Up 660 basis points year-over-year, gross margin also surpassed the consensus estimate.
The driver of this impressive quarterly performance? Maxim (NASDAQ:MXIM) Group’s Anthony Vendetti believes it was “the continued momentum and traction CELH is gaining as its products expand both nationally and abroad.” Even though he acknowledges that consumer purchasing behaviors have changed, the analyst highlights the fact that functional beverage demand is holding up strong.
In addition, COVID-19 played a role during the first quarter. “CELH has seen a surge in grocery deliveries and online orders and, in response, has stockpiled inventory and secured additional distribution and co-packer agreements. Additionally, the company has pivoted its marketing resources to digital programs, better reflecting the current macro environment. Although we believe that CELH has received a short-term sales bump from COVID-19, we remain positive in the long-term as the company continues to expand its distribution network and highlight itself as a ‘lifestyle brand,’ where active, routine customers continue to drive growth,” Vendetti explained.
All of the above combined with a compelling valuation prompted Vendetti to maintain a Buy recommendation. On top of this, the four-star analyst bumped up the price target from $8 to $12, bringing the upside potential to 36%.
Looking at the consensus breakdown, 4 Buys and no Holds or Sells give CELH a unanimous Strong Buy analyst consensus. Not to mention the $11.31 average price target suggests 28% upside potential. See the CELH stock analysis.
To find more ideas for stocks trading at attractive valuations, visit Investing Insights.