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Analysts say ‘Buy the downturn’ in these three stocks
The smart investor knows that the best time to buy is when a stock is priced low – it’s just the old game of ‘buy low and sell high’, the old advice on how to make money. But with the S&P at near-record levels, it’s hard to see when a stock has been priced low. The key is just to take them as individuals. The stock market is the world’s largest real – time experiment in calculating a large mass. The markets as a whole may rise, while some individual stocks will decline. And if a stock hits the bottom, it will become a buying opportunity, as long as its basics are sound. Wall Street analysts are building their reputation by finding these opportunities and bringing them to our attention. Using the TipRanks database, we were able to find three stocks that are lower than their recent peaks, while some analysts recommend ‘buying the payback’. Let’s take a closer look. Iovance Biotherapeutics (IOVA) We start with Iovance Biotherapeutics, a mid-cap biotech firm in the field of immune oncology, which develops tumor-infiltrating lymphocyte (TIL) therapies for cancer treatment. At its core, the technology is aimed at using the patient’s own immune system to attack the cancer. Lifileucel, the company’s main candidate, is on track for a Biologics License Application at the FDA, the next step in the ongoing approval process. The drug has shown promise as a treatment for metastatic melanoma, and follow-up studies are underway in phase 2 clinical trials. In addition, lifileucel is being investigated for administration against cervical cancer; the program is enrolling patients in phase 2 study, and enrolling patients in cohorts 1 and 2 has been completed. This background, coupled with the 40% drop in the stock since its recent high in February, has caught the attention of 5-star analyst Joseph Pantginis of HC Wainwright. ‘[We] believes the stock fallback is once again creating a compelling entry point for investors ahead of the planned 2021 BLA submission for its TILs in both melanoma and cervical cancer. It is important to remember that melanoma has an RMAT status and that cervix has a breakthrough therapy designation … ‘The analyst added:’ We believe the recent encouraging data and trial adjustments are an indication of the clinical promise of lifileucel and it strengthens the case for commercialization before the expected BLA Pantginis supports these remarks with a buy rating and price target of $ 50 which implies a 57% increase in the next 12 months. (Click here to see the Pantginis record) The latest medical technology has caught the attention of Pantginis’ The stock has 5 recent reviews and it’s all for sale, offering a unanimous consensus rating from Strong Buy analysts. IOVA has an average price target of $ 54.80, indicating that the share price is an upward twelve months of 72%. (See IOVA stock analysis on TipRanks) Quidel Corporation (QDEL) The next ‘retreat’ stock we are looking at is Quidel, a $ 5.9 billion company in diagnostic healthcare. Quidel, in southern Ca lifornia, has global operations and offers products in a variety of diagnostic tests. The company achieved a major victory last year when it received FDA approval for a COVID-19 antigen test. Earlier this month, Quidel announced emergency approval for its Quickvue home COVID-19 test kit, available to patients with a medical prescription. In February, the company reported its Q4 results for 2020, with total revenue of $ 809.2 million, an increase of 69% quarter-on-quarter – and an even more impressive profit of 431% on a yearly basis. The increase was driven by COVID-19-related products, which generated $ 678.7 million in quarterly sales. Profit rose to $ 10.78 compared to 71-cent earnings in the previous quarter. The corona pandemic was a boon for the medical testing sector, and Quidel saw much of the benefit. The company made an annual profit, similar to its Q4 results. For 2020, Quidel showed $ 1.66 billion in revenue, up 211% year-over-year, with COVID-19 revenue of $ 1.16 billion. The EPS for the year was $ 18.60, compared to $ 1.73 in 2019. Ironically, the success of medical efforts against COVID-19 Quidel boosted and set it up for the current downside. As the vaccination program continues and expands, and slows down the spread of the virus, the need for rapid mass testing will decrease. Quidel is unlikely to see its COVID business completely evaporate in the short term, but for the medium term it is likely to see it begin to return to a pre-pandemic normal. The outlook leaves investors wondering if the current high stock valuation could last. This thesis was presented by Alexander Nowak, analyst at Craig-Hallum, on QDEL. Looking at the recent success of the company, he writes: ‘This share almost drowned during COVID, but the business accelerated significantly during the same period. QDEL increased its customer base by 60% in one year, more than doubled its placements, signed long-term test contracts, five times more capacity to support more tests, markets, geographical areas, to move to the alternative care channels, to move the home test market build and generated significant cash. Looking to the future, the 5-star analyst adds: ‘But when COVID is fully over, we still see QDEL normalizing $ 10 + $ 47 cash per share, which is more than double the current valuation was. For investors who can look past the volatility, the pullback is an excellent buy point. For this purpose, Nowak QDEL shares are considering a buy, setting a price target of $ 341, which implies a 148% increase for the coming year. (To see Nowak’s record, click here.) Now turn to the rest of the street, where QDEL mostly receives Buys from Nowak’s colleagues – 3 as it happens. An additional 1 sale can not detract from a consensus rating for moderate purchase. Given the average price target of $ 239, analysts expect equities to rise 71% from current levels. (See QDEL stock analysis on TipRanks) Sunrun, Inc. (RUN) When we change gears, we look at an alt-energy enterprise, Sunrun. This firm specializes in solar power generation setups for home use. Customers who want to install and operate solar panels on the roof can choose from purchase or rental options and can use the power generated in various ways, either for home use or to resell to the local utility provider. Sunrun shares have declined by 40% since their recent high in January. The decline is more than anything else. The solar sector has generally grown since the November election, believing that the Biden administration will provide regulatory encouragement for the industry, but that the recent upswing has slightly worried investors that Sunrun will not act in the future. However, the decline was certainly not the result of erroneous performance. At the end of February, Sunrun reported $ 320 million in 4Q20 revenue, up 31% year-on-year. The strong revenue was driven by an 18% increase per year in the customer base, bringing the company 550,000 total customers. Among customers, the average contract life is still 17 years, and the annual recurring revenue is $ 668 million. Taken together, these factors prompted Tristan Richardson, analyst at Truist, to repeat his Buy rating. ‘[We] think the downturn is an attractive opportunity leading to an accelerated growth profile in 2021 and customer wind (storage, VSLR synergies). We modestly present our forecast for the installation in the short term and expect more than 20% annual growth, ”says Richardson. The analyst continued: ‘Against the background of the past few weeks of growth stocks and the sale of risk assets (including solar power), as interest rates are volatile, we underline the importance of the largest US installer to accelerate growth from a math perspective to use. profile not to emphasize the problem from a fundamental perspective. Richardson supports his position with a price target of $ 95, indicating confidence in an upward potential of 66% for one year. (To see Richardson’s record, click here.) The Truist view on Sunrun is no outlier; there are 14 reviews of this stock, and it contains 11 buys at only 3 stocks, giving the stock a strong buy consensus rating. Shares are priced at $ 57.28 and their average price target of $ 82.10 indicates a rise of 44%. (See RUN stock analysis on TipRanks.) To find great ideas for stocks that trade at attractive valuations, visit TipRanks ‘best-selling stocks, a new tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the proposed analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.