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3 Monster Growth actions that can reach new highs
Every investor knows that you cannot look at a stock’s past performance as an indicator of future earnings. It has even become an axiom, one of the basic phrases that we all learned at Econ 101: ‘Past performance does not guarantee future returns’ is a common formulation. But this simple sentence, while true, raises a difficult question: how should an investor judge a stock? The truth is that the past is a prologue, not a prophet, and investors can profit by considering past performance as one of many factors in the valuation of a stock. There is no right path to success here, and each action must be considered as a unique individual – which makes past performance a useful indicator, even if it is not the only one. Investors should also look at Wall Street’s opinion – are analysts impressed by the stock? And besides, what is the potential for recovery? We now have a useful profile for monstrous growth stocks: earnings from gangbusters, buying ratings from the Wall Street analyst corps and a considerable advantage for the coming year. Three stocks in the TipRanks database are signaling all those signs of strong future growth. Here are the details. Amyris, Inc. (AMRS) Say ‘biotechnology’ and most people will assume that you are talking about pharmaceuticals. But Amyris gives the biotech industry a different twist. The company focuses on the development of synthetic chemical substitutes for common petroleum-based products, plants and animals. Amyris operates three divisions for the development of cosmetics, health and well-being and food flavorings, which are offered to the public through three direct consumer brands: Pipette, Biossance and Purecane. AMRS shares have shown rapid growth recently, taking off in the past six months. During that time, the company’s stock increased 786%, impressive by any standard. The company’s growth has accelerated in recent months, and a look at the recent 4Q20 earnings report will give some reasons. The fourth quarter marked the third consecutive quarter of record product sales. The company recorded $ 80 million in total sales, more than double the result for the previous quarter. Of that total, product revenue of $ 35 million grew 71% year over year. The company also saw a significant increase in gross margins in the annual comparison, from 56% to 66%. Rising sales led to an annual revenue of $ 173 million, a 13% year-over-year gain. Looking towards the end of 2021, the company is gearing itself towards a continuous increase in product sales, leading to a total annual revenue close to $ 400 million, well above the consensus forecast of $ 231 million. Covering these actions for Roth Capital, 5-star analyst Craig Irwin looks at the company’s future direction and recent growth. Irwin also points out that Amyris is well positioned to maintain its fast pace. “Long-term growth is supported by a strong flow of new molecules under development with strategic partners. With 13 ingredients on the market and 18 in active development, we expect a healthy and continuous expansion of the portfolio as they reach the market until 2025. Mgmt expects to add another 8 to 10 ingredients to the active development pipeline in 2021, maintaining a broad channel to expand the potential of products and ingredients in the long term, ”said Irwin. Unsurprisingly, Irwin classifies AMRS as a purchase, and its target price of $ 33 implies a potential increase of 59% in the next 12 months. (To see Irwin’s track record, click here) Accelerated growth will always attract Wall Street analysts to an innovator. Amyris obtained 4 recent Purchase reviews, all consolidated into a Strong Buy consensus rating. The AMRS has a share price of $ 20.65 and, even after its recent appreciation, the average price target of $ 25.50 still suggests an increase of 23% in one year. (See AMRS stock analysis at TipRanks) Clean energy fuels (CLNE) The next growth stock we are considering is in the renewable fuels industry. This is a sector that is growing partly on the basis of politics – renewable energies are in fashion – and partly with the strength of the business model. Clean Energy produces renewable natural gas (RNG) for transportation purposes. The company’s fuel products are marketed to transit and transportation customers; Clean Energy customers include Estes Express Lines, UPS and the New York City MTA. In early February, Clean Energy announced an important multi-year contract to supply the LA County Metro system – the largest bus fleet in the United States – 47.5 million gallons of RNG. The deal is part of a move by LA Metro to low-carbon fuels. Energia Limpa won three supply warehouses for five years, with the option of extending the contract for another three years. This, in addition to five clean energy supply warehouses already operated for Metrô. The LA Metro news was released after CLNE’s shares showed explosive recent growth, part of an overall trajectory that has seen shares rise 492% over the past 6 months. This increase coincided with several other recent contracts, totaling more than 58 million gallons of RNG. Customers include Pacific Green Trucking and Waste Connections. Craig-Hallum analyst Eric Stine, rated 5 stars on TipRanks, writes about Clean Energy: “We think it is becoming increasingly clear that natural gas (and RNG) will be a critical fuel as part of decarbonizing transport with Amazon’s initial deployment an exclamation point. With the dominance of the CLNE and the RNG plans, the significant financial impact of the RNG which is magnified by the greater contribution of the low-CI RNG and the more expansive station footprint, we see the CLNE as an ideal investment in natural gas and we also observe that is one. of the few pure investments in renewable natural gas. ”In light of his optimistic comments, Stine places a purchase rating and a target price of $ 25 on the CLNE. Its target indicates confidence in a 68% growth for next year. (To view Stine’s track record, click here) Overall, Wall Street analysts are optimistic about the stock’s ability to continue to melt to new highs. The CLNE’s strong consensus rating is based on 3 purchases and 1 wait. It doesn’t matter that your average price target of $ 23 puts the potential 12-month increase at around 55%. (See CLNE’s stock analysis at TipRanks) Aemetis (AMTX) Aemetis is another company focused on renewable fuels. Aemetis’ main products are ethanol and biodiesel, along with glycerin, an important industrial chemical product. The company does not focus on one sector, however, and has a broad production portfolio that also includes distillery grains, edible oils and palm oil, among other food products. Aemetis markets heavily in the food sector in India and in the Central Valley of California. Aemetis’ shares showed robust recent growth, with a net gain of 736% in the year. A significant part of that gain came after the company’s announcement that it will start a ‘Carbon Zero’ plant to produce trucks and renewable aviation fuels, with a capacity of 23 million gallons per year. The company also published a five-year growth plan for US $ 1 billion in total revenue until 2025. Aemetis released its 4Q20 results earlier this month and, despite the losses year after year, the company was able to give a touch positive to the results. The report noted that while 2020 saw serious demand disruptions, ethanol and fuel alcohol revenue was $ 112 million, just $ 3 million less than the previous year. Amit Dayal, ranked 9th overall among Wall Street analysts, notes all of this in his recent coverage of AMTX. “We believe that the company is emerging as one of the leaders in implementing a zero to negative carbon intensity (CI) strategy to bring renewable fuels to the market that should support a higher margin profile in relation to competitors. We also believe that the company synchronized these initiatives well during a very friendly federal regulatory environment, increasing the likelihood of success ”, wrote Dayal. To that end, Dayal sets a target price of $ 28 for the stock, supporting its buy rating and suggesting a 34% growth potential in one year. (To view Dayal’s history, click here) AMTX’s shares have escaped the radar so far and have received only 2 recent ratings. Both agree, however, that this stock is a purchase proposal. The shares are quoted at US $ 20.83, with an average target of US $ 26.50, which indicates room for a 27% growth at the end of the year. (See the AMTX 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 investment.