We’ve sorted through the TipRanks database, and found some stocks to jumpstart your investing in the new year. These stocks share a low price of entry, a high upside potential, and a ‘Strong Buy’ rating from top -rated market analysts. One of them even offers a 10% dividend. These stocks all showed up on the Trending Stocks tool, which shows which companies have sparked the attention of the analysts. Let’s take a look now.
If you travel much, then there’s a good chance that you’ve used this company’s services. Boingo provides wireless access for mobile Internet in public access locations: airports, stadiums, universities, and apartment complexes. The company has been expanding steadily through the 2010s, and now offers service over more than one million small cell networks.
From an investor’s perspective, WIFI show’s real promise. Last month Boingo’s Q3 earnings beat expectations. Yes, the company reported a 1 cent per share loss, but the forecast had been a 10 cent loss – the result was a 90% beat. Revenues came in at $65.25 million, 2.36% higher than the $53.66 million forecast.
WIFI’s strong quarterly report attracted some equally strong analyst reviews. On Nov 2, Oppenheimer’s Timothy Horan (Track Record & Ratings) set a price target of $39, implying an impressive 98% upside to the stock. In his comments, Horan took particular note of the growth in revenues and the company’s $13 million cash position. He said, “[T]he service is now much more attractive to carriers and we expect increased customers and usage…” Horan is a five-star rated analyst, with a 54% success rate and 39% average return when recommending WIFI stock.
Also on Nov 2, Stephen Ju (Track Record & Ratings) from Credit Suisse raised his price target on WIFI to $38, commenting that “higher-than-expected contribution from newly acquired Elauwit helped to drive a top and bottom line beat…” Like Horan, Ju is a five-star analyst with a record of success on this particular stock – his average return is 56%.
Overall, WIFI ‘s ‘Strong Buy’ rating is based on 6 ‘buy’ reviews and no ‘holds’ or ‘sells.’ The average price target, $36, suggests 87% upside potential for this stock.
Lumentum produces and markets hardware for optical networking and commercial lasers. It’s a growth industry, and Lumentum reported as much in its Q1 FY19 earnings report. That report, on Nov 1, showed a 27% positive beat in earnings per share, $1.31 compared to the expected $1.03. Quarterly revenues were $354.1 million, far higher than the year-ago quarter’s $243.2 million. Lumentum’s just-concluded acquisition of Oclaro, a leader in the manufacture of optical components for the fiber-optic industry, should keep that momentum going. In short, LITE has a bright outlook.
Top market analysts are taking note. Since Dec 17, LITE has had three analyst reviews, all giving ‘buy’ ratings. The first came from Richard Shannon (Track Record & Ratings) of Craig-Hallum, who raised his price target to $65, and noted bluntly, “[T]he stock is too cheap for a well-run, highly profitable company that is now easily the largest in the optical communications market, and should be bought at current levels.” Shannon’s new price target gives suggests a 62% upside for LITE.
Also on Dec 17, Needham’s Alex Henderson (Track Record & Ratings) upgraded his forecast for Lumentum’s yearly performance. While he did not set a specific target price for the stock, Henderson did say, “We are increasing our EPS estimates for CY19 to $5.10 from $4.67 and CY20 to $6.25 from $5.40. Operationally, Lumentum looks well positioned.” Henderson has a 53% success rate with LITE stock, and a 24% average return.
The most recent review of this company comes from Stifel’s John Marchetti (Track Record & Ratings), who reiterated his ‘buy’ rating on Dec 20, with a price target of $60. He said, “We expect there is likely upside to our estimates if the company is able to capitalize on the increased scale and bring products to market more quickly…” His price target suggests a 49% upside to the stock.
Lumentum’s analyst consensus of ‘Strong Buy’ is based on 15 ratings, including 13 ‘buys’ and 2 ‘holds.’ Compared to the current share price of $40, the average price target of $63 gives LITE a 58% upside.
Viper is an oil company, operating in Texas’ Permian Basin. With the recent fall in oil prices, Viper’s share price has also taken a hit, but the company’s business model puts it in a position to remain profitable. Simply put, Viper owns the mineral rights and contracts, and collects royalties from the drilling companies that do the heavy work. The model keeps the major equipment and other capital investment off Viper’s books.
Viper’s position has brought it to the attention of financial analysts and bloggers. Most recently, on Dec 17, Citi’s Atidrip Modak (Track Record & Ratings) maintained a ‘buy’ rating on the stock, but in a nod to lower oil prices lowered the price target to $33. Even that lower price target still suggests a 28% upside to the stock.
Four-star finance blogger Neil George (Track Record & Ratings) set out the bullish case for VNOM on Dec 14. He pointed out to main supports for this stock. First, “Petroleum is a major component of the U.S. and global economy. This means that the market isn’t going away, and money will continue to be made from the upstream producers through the midstream pipelines and downstream refiners.”
And specific to Viper: “The company has some 14,000 acres, with a fraction of that in current production. This means more potential for even higher growth rates in production, resulting in even higher royalty cash payments.”
VNOM maintains a ‘Strong Buy’ rating in TipRanks’ database, having 10 ‘buys’ and no ‘holds’ or ‘sells.’ The shares currently trade at just over $25.75, so the average target price of $44 represents a 73% upside potential.
One last point for investors to note, Viper Energy has a history of regularly paying out very high dividends. The payout has grown consistently since 2014, from 25 cents per share to the current 58 cents. At $25 per share, that makes the annual dividend $2.32, for a yield near 9%.
Author: Michael Marcus
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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