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3 monster growth stocks with potential for additional gains
At the end of the day, investors want to see a return. To achieve this goal, experienced Wall Street observers often resort to one strategy over and over again: investment in growth. A solid growth move is a name that seems destined not only to grow at an above-average rate, but also to reward investors generously in the long run. Rolling up their sleeves, investors are walking the Wall Street sidewalk in search of quotes with impressive long-term growth prospects. However, having a goal in mind is one thing, but focusing on those actions prepared for gains in the years to come is another story altogether. With that in mind, we prepare and set out on our own search for investment opportunities with strong growth narratives. Using the TipRanks database, we were able to identify three tickers with a purchase rating, each with considerable appreciation potential, according to Wall Street analysts. Cowen Group (COWN) We will start with Cowen Group, an investment bank based in New York. Cowen offers investment management and brokerage services, and is known as a risk broker willing to move early into disruptive sectors; Cowen was one of the first drivers of high-tech dot-com actions and, more recently, in the cannabis sector. The bank’s main operations are in the USA and the United Kingdom. The bank’s recent shareholding growth has been extreme; since this time last year, COWN’s shares have risen 534%. The appreciation of the shares raised the company’s market capitalization to more than US $ 1 billion and brought solid returns to investors during the difficult crisis of the crown. After a drop in 1Q20, the company presented three consecutive quarters of revenue and profit gains in relation to the previous year. These gains were particularly impressive in the 2nd and 4th quarters; looking at 4Q20, the most recent report, Cowen recorded a record quarterly net revenue of $ 90.5 million, due to GAAP measures; Full-year revenue was $ 209.6 million. The gains were driven by record performance in the investment banking and brokerage divisions. Cowen’s performance impressed Piper Sandler 5-star analyst Sumeet Mody, who wrote: “We remain very positive in COWN after the strong earnings results in 4Q20. After the company’s sustained and elevated banking and brokerage activity throughout 2020, the prospects for profits have improved significantly, as banking pipelines remain robust and brokerage activity has started strong throughout the year … The beat has been broad across all business lines, but largely driven by higher-than-expected investment bank and brokerage revenues, as well as lower expense ratios. To this end, Mody assesses Cowen shares an Overweight (ie Buy), and his $ 71 target price suggests room for a 78% increase in one year from current levels. (To see Mody’s history, click here). The Piper Sandler analyst is the optimistic outlier here, but Wall Street, for the most part, agrees with him in Cowen, as shown by the 3-to-1 division favoring Buy to Hold analysis. The shares are quoted at $ 39.86 and their average price target of $ 47 implies a ~ 18% increase for next year. (See COWN stock analysis at TipRanks) Commercial vehicle group (CVGI) Talk about the automotive industry and, of course, you will start talking about automakers. But the industry is more than that – there is a whole network of parts suppliers and service companies that support automakers, and the Commercial Vehicle Group lives in that niche. The company provides a variety of services for the automotive sector, including warehouse automation, robotic assemblies, seating systems, plastic products, EV assemblies and mechanical assemblies. The Commercial Vehicle Group’s customer base includes the commercial truck industry, electric vehicle manufacturers and the e-commerce storage industry. The big story here, for CVG, is the company’s warehouse automation segment. The corona crisis inspired a major push towards electronic commerce, and CVG benefited from this change. The company’s warehouse automation segment had a higher volume in 2020 – and greater efficiency due to cost reduction actions during the year. Fourth-quarter revenue reached $ 216 million, a 14% year-over-year gain. Operating income for the quarter was $ 5 million, a gain of $ 9.3 million year on year. The quarterly results marked the first quarterly earnings year on year for the company in 2020, and come after the company’s shares have consistently outperformed throughout the year. CVGI’s shares have risen 543% in the last 12 months – far surpassing the broader markets. In a move that bodes well for the future, CVG announced earlier this month a partnership with Xos, a commercial manufacturer of electric vehicles, to develop sustainability initiatives. Covering these shares for Barrington, 5-star analyst Christopher Howe was impressed by the company’s new business portfolio. “The company achieved net new business gains of more than $ 100 million annualized in 2020, mainly driven by warehouse automation and electric vehicles, all of which are due to be converted this year. In the future, she expects to reach another $ 100 million in net earnings from new business in 2021, ”noted Howe. The analyst added “[EV] activity is robust [and] the company predicts that these programs will remain in the development phase until 2021, subsequently turning into revenue as soon as the product’s baselines stabilize. Regarding warehouse automation, according to Logistics IQ, the demand for warehouse automation products is expected to grow approximately 14% per year until 2026. ”In light of these comments, Howe evaluates CVGI’s shares as Outperform (that is, Buy), with a target price of $ 14 to indicate a 39% year-on-year upside. (To see Howe’s history, click here) There are two analyst reviews on file for this company, and both agree: CVGI is a stock to buy. The shares have an average target price of $ 14, the same as Howe’s. (See CVGI’s stock analysis at TipRanks) Zedge, Inc. (ZDGE) We will conclude our analysis of the growing stocks with one resident of the software industry, Zedge. This company offers customization options for smartphones, which proved to be quite popular. The Zedge platform offers wallpapers, ringtones, application icons, widgets and notification sounds, among other features. The Zedge app has more than 450 million installations and more than 30 million monthly active users – important metrics in the smartphone application universe. But perhaps the most telling statistic is this: Zedge has consistently been among the top 25 free apps on Google Play for the past seven years. That kind of popularity gives a software company a solid foundation, and Zedge’s shares have reaped the benefits. The stock rose an astonishing 932% in just the last 6 months, a growth that coincided with the increase in revenues. Zedge had 5 consecutive quarters of annual revenue growth. The company released its 2Q21 fiscal results on March 15, and the results were record-breaking for the company. Revenue was $ 5.3 million, net income of $ 2.3 million and earnings per share of 17 cents. Monthly active users reach 35.4 million. The revenue number represented a 101% gain year on year; EPS rose from just 1 cent the previous year. After these gangbuster results, Zedge revised its revenue guidance for the entire year from 2021 upwards, for a growth forecast of 75% to 80%. Maxim Group analyst Allen Klee is impressed by Zedge and sees a clear path for the company. “Zedge is accelerating the growth of its advertising platform and new offers. We expect the company to strengthen its ecosystem so that the 35 million monthly active users are more engaged on the platform, resulting in better retention and monetization. We also hope that 2021 will have catalysts for the growth of Shortz tales and new entertainment podcasts, ”said Klee. Based on all of the above, Klee assigns a Purchase rating to ZDGE shares, along with a target price of $ 24. This goal conveys Klee’s confidence in Zedge’s ability to rise 57% more in the next twelve months . Some actions fly below the radar, and ZDGE is one of them. The Zedge analysis is the only recent analysis by analysts at this company, and it is decidedly positive. (See ZDGE stock analysis on TipRanks) To find good ideas for trading growth stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.