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3 “strong buy” actions set for monster growth in 2021
We have turned a new page on the calendar, Old Man ’20 is out the door, and there is a feeling that 21 will be a good year – and so far, so good. The markets closed 2020 with modest session gains to cover larger annual gains. The S&P 500 rose 16% during the year of the corona crisis, while the NASDAQ, with its heavy technology representation, showed an impressive annual gain of almost 43%. The advent of two viable COVID vaccines is fueling a wave of general optimism. Top Wall Street analysts are looking at the stock markets, finding jewelry that investors should seriously consider in this new year. These are analysts with 5-star ratings from the TipRanks database, and they are pointing out stocks with strong buy ratings – in summary, this is where investors can expect stock growth in the next 12 months. We are talking about a return of at least 70% in the next 12 months, according to analysts. ElectraMeccanica Vehicles (SOLO) Electric vehicles, EVs, are becoming more popular as consumers look for alternatives to the traditional internal combustion gasoline engine. Although EVs simply move the combustion source from under the hood to the power plant, they offer real advantages for drivers: they offer greater acceleration, more torque and are more energy efficient, converting up to 60% of the battery’s energy into forward movement. These advantages, as EV technology improves, are beginning to overcome the disadvantages of shorter range and expensive batteries. ElectraMeccanica, a small capsule manufacturer in British Columbia, is the designer and marketer of Solo, a single-seater and three-wheel EV built for the urban passenger market. Technically, the Solo is classified as an electric motorcycle – but it is fully enclosed, with a door on each side, has a trunk, air conditioning and a Bluetooth connection, and travels up to 160 kilometers on a single charge at speeds up to 80 miles an hour. The recharge time is low, less than 3 hours, and the price of the vehicle is less than $ 20,000. As of the third quarter of 2020, the company delivered its first shipment of vehicles to the U.S. and expanded to six more U.S. urban markets, including San Diego, CA and Scottsdale and Glendale, AZ. ElectraMeccanica has also opened four new stores in the United States – 2 in Los Angeles, one in Scottsdale and one in Portland, OR. In addition, the company started the design and marketing of a version for the Solo fleet, to reach the commercial fleet and car rental markets in the first half of this year. Raig Irwin, 5-star analyst at Roth Capital, is impressed with Possible SOLO applications in the fleet market. He writes of this opening: “We believe that the pandemic is a favorable wind for fast food chains that explore better delivery options. The networks seek to avoid third-party delivery costs and balance the implications of the brand identity of vehicles belonging to the operator and the company. SOLO’s 160 km range, low operating cost and standard telematics make the vehicle a good fit, in our opinion, especially when location data can be integrated into a network’s kitchen software. We would not be surprised if SOLO made some announcements with large networks after customers validate the plans. ”Irwin places a buy rating on SOLO, supported by its target price of $ 12.25, which implies a potential of 98% for inventory in 2021. (To watch Irwin History, click here) Speculative technology is popular on Wall Street and ElectraMeccanica fits that profile perfectly. The company has 3 recent reviews, all of which are purchases, making the consensus of analysts a strong unanimous purchase. The shares cost $ 6.19 and have an average target of $ 9.58, resulting in a 55% increase in one year. (See the analysis of SOLO shares in TipRanks) Nautilus Group (NLS) Based in the state of Washington, this fitness equipment maker had a big share gain in 2020, as its shares soared by more than 900% over the year, even representing recent falls in the value of the shares. Nautilus won with the social blocking policies and the academies were closed in the name of interrupting or decelerating the spread of COVID-19. The company, which owns major home fitness brands like Bowflex, Schwinn and the namesake Nautilus, offered home fitness fans the equipment they need to stay in shape. Stock appreciation accelerated in 2H20, after the company’s revenues showed a recovery in first quarter losses due to the ‘corona recession.’ In the second quarter, revenue reached $ 114 million, an increase of 22% sequentially; in the third quarter, revenues reached $ 155, for a sequential gain of 35% and a massive gain of 151% year on year. Profits were equally strong, with a third-quarter profit of $ 1.04 EPS beating well above the previous year’s quarterly 30-cent loss. Watching this Lake Street Capital action is 5-star analyst Mark Smith, who is optimistic about this action. Smith is especially aware of the recent drop in stock prices, noting that the stock is now off its peak – which makes it attractive to investors. “Nautilus reported explosive results in 3Q: 20 with strength in its entire portfolio … We think the company has orders and order backlog to boost sales and earnings for the next quarters and we think we saw a fundamental change in the year consumer behavior. We would see the recent pullback as a buying opportunity, ”said Smith. Smith’s $ 40 target price supports his Buy rating and indicates a hefty 120% growth potential in one year. (To see Smith’s history, click here) Strong Buy’s unanimous consensus rating shows that Wall Street agrees with Smith on the potential of Nautilus. The stock has 4 recent reviews and all are to buy. The stock closed 2020 at a price of $ 18.14, and the average target of $ 30.25 suggests that the stock has room for ~ 67% upward growth in 2021. (See NLS stock analysis at TipRanks ) KAR Auction Services (KAR) Last, but not least, is KAR Auction Services, an auto auction company, which operates online and physical markets to connect buyers and sellers. KAR sells to commercial buyers and individual consumers, offering vehicles for a variety of uses: commercial fleets, private travel and even the second-hand parts market. In 2019, the last year for which full-year figures are available, KAR sold 3.7 million vehicles for $ 2.8 billion in total auction revenue. The ongoing corona crisis, with its social blocking policies, hampered car travel and reduced demand for used vehicles in market segments. KAR’s shares fell 13% in 2020, in a year of volatile trading. In the recent 3Q20 report, the company posted revenue of $ 593.6 million, down 15% year on year. Third-quarter earnings, however, of 23 cents per share earnings, fell less, 11% year-on-year, and showed a strong sequential recovery from the second quarter’s 25-cent EPS loss. As the new vaccines promise to end the COVID pandemic later this year, and lift the local travel blockage and restrictions, medium to long-term prospects for the used car market and KAR auctions are improving, according to Truist analyst Stephanie Benjamin. The 5-star analyst noted: “Our estimates now assume that the volume recovery will occur in 2021 vs. 4Q20 according to our previous estimates … Overall, we believe that the 3Q results reflect that KAR is executing the initiatives under its control well, specifically improving its cost structure and transforming itself into a pure digital auction model. ”Looking ahead, she adds,“… defaults and defaults on auto loans and leasing have increased and we believe this will represent a significant amount of wind in favor in 2021, as repurchase activity resumes. In addition, repo vehicles generally require ancillary services that are expected to yield higher RPU. This influx of supply should also help to moderate the used price environment and lead resellers to fill their lots, which remain at low levels for three years from an inventory perspective. ”In line with these comments, Benjamin sets a price target of $ 32, implying a high% potential year-over-year appreciation for the stock and classifies the KAR as a Buy. (To see Benjamin’s track record, click here) Wall Street is generally willing to speculate about the future of the KAR, as indicated by recent analyzes, which divide 5 to 1 Buy to Hold, and make the analyst agree to see a Strong Buy. The KAR is selling for $ 18.61, and its average price target of $ 24.60 suggests it has room to grow 32% from that level. (See TipRanks KAR stock analysis) To find good ideas for stock trading with compelling 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.