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Wells Fargo: 2 attractive actions with more than 70% positive potential
Wells Fargo analysts have been examining the market, or more specifically, examining the winners and losers of current market conditions. In a recently published note, senior equity analyst Chris Harvey writes, “Superior risk and small cap performance has made this stock market a stock-picker’s paradise.” Obviously, then, Harvey sees low-capitalization stocks doing well now, with plenty of options for investors to choose from. Although small caps generally represent a more risky investment, a distinct advantage they have over larger names is the possibility of higher returns. This is where the risk / reward paradigm comes into play. Following Harvey’s note, the company has made a series of recommendations, finding small-cap stocks on the brink of growth and those that promise returns of 70% or more in the next year. We ran two of them on the TipRanks database to see what other Wall Street analysts have in mind. Ping Identity Holding (PING) Beginning in the technology sector, Wells Fargo’s first choice we are examining is Ping Identity Holding Corp, which specializes in identity management. The company offers a range of products that allow customers to control login and access to networks and databases. Although it has been in the market for almost 20 years, Ping Identity has been a public company for only a year and a half. In the company’s most recent quarterly report for 4Q20, Ping reported mixed results and saw shares drop 20% in the period immediately following. EPS was a net loss of 4 cents per share. First-tier revenues of $ 63.2 million fell 7% year on year, but increased 5.5% sequentially and marked the second highest quarterly turnover the company has seen since going public. For the entire year, total revenue reached US $ 243.6 million, a result was driven by a 15% increase in annual recurring revenue (ARR), which reached US $ 259.1 million. The company reported a 34% increase in customers with more than $ 1 million in ARR, a solid gain on an important metric. Covering the shares of Wells Fargo, analyst Philip Winslow was particularly impressed by the ARR gain. “Ping reported solid results in the fourth quarter with ARR above expectations. The ARR growth of 15% year over year was ahead of the consensus estimates of $ 256.1 million driven by the continued adoption of SaaS solutions that accelerated more than expected and represent + 15% of the total ARR ”, wrote the analyst 5 stars. Winslow added: “The company is experiencing continued signs of pent-up demand as customers start shopping, as projects previously suspended due to COVID-related budgetary pressures are popping up in the pipeline, with companies modernizing legacy systems whose deficiencies have been exposed to the last year. “To this end, Winslow assesses PING as an Overweight (ie Buy) and has a target price of $ 40 which indicates a 76% upside potential in the next 12 months. (To see the history Winslow, click here) Winslow is not an isolated case in his optimistic stance, but there is some division on Wall Street in relation to Ping. The analyst’s consensus view is a moderate buy, based on a dozen reviews, dividing it in 7 purchases and 5 retentions. The shares are quoted at $ 22.59 and their average price target of $ 33.71 suggests a 49% increase in one year. (See PING inventory analysis at TipRanks) Sangamo Therapeutics (SGMO) Let’s go change gears and look at the biosciences sector. Sangamo is a biotechnology company focused on creating genomic medicine therapies to treat genetic diseases. The company’s pipeline includes 17 different programs at various stages of development, targeting a range of diseases, including IBD, beta thalassemia, sickle cell disease and hemophilia A. In December, the company reported an update on its ongoing collaboration with Pfizer on fitelparvovec giroctocogene . This is a gene therapy product under development as a treatment for hemophilia A, and follow-up data from the Phase 1/2 Upper study showed that the drug was well tolerated and safe in the small group of patients tested. Giroctocogene fitelparvovec is now starting the patient dosing phase of the Phase 3 AFFINE study. In February, Sangamo reported that it started a global collaboration with Biogen in the development and commercialization of new gene regulation therapies. The therapies under consideration will target Alzheimer’s, Parkinson’s and other neurological diseases. Among the bulls is Wells Fargo analyst Yanan Zhu, who writes about the big picture: “Overall, we continue to see significant growth potential in the company’s genomic drug pipeline programs and platforms, in particular the regulatory therapy platform T cell (Treg), which can address a wide range of autoimmune diseases, and the ZFP-TF gene regulation platform, which can address certain neurological indications that are difficult to target … ”In light of these comments, Zhu reiterates the classification of overweight (ie purchase) of the company on the stock and set the target price at $ 29, suggesting a sharp rise of 158% (to see Zhu’s track record, click here) Overall, the SGMO attracted optimism mixed with caution when it comes to consensus opinion among sell-side analysts. Of the 5 analysts surveyed in the last 3 months, 2 are optimistic about the actions, while 3 remain marginalized. Still, bulls have an advantage, as the average target price is $ 19.40 and indicates a 72% increase. (See SGMO stock analysis on TipRanks) To find good ideas for stock trading 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 investment.