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Goldman Sachs: These 3 Stocks Could Spike at Least 40%
Let’s talk volatility. The NASDAQ kicked off this week with a dip into correction territory, a fall to just over 10% below its February peak. And now? After three trading sessions, the index has bounced back by 5.5%. Behind the volatility lies an economy that may be gearing up to blast off. The strategy team at Goldman Sachs sees the February jobs numbers, along with the COVID relief package in Congress (the House has just passed the Senate version, sending the bill to President Biden’s desk), as net positives. Goldman economist Jan Hatzius predicts a 7.7% GDP for 2021, and says of immediate conditions, “The main reason that we expect a hiring boom this year is that reopening, fiscal stimulus, and pent-up savings should fuel very strong demand growth.” Following up on Hatzius’ optimism, Goldman’s stock analysts have been busy tapping the stocks they see as potential winners under current conditions. They have certain commonalities that would increase their interest for investors: Strong Buy ratings, and, according to Goldman, at least 40% upside potential for the next 12 months. Let’s find out what else makes these particular stock so compelling. Bioventus (BVS) The first Goldman pick we’re looking at is Bioventus, a medical innovator. The company has an active development program focused on treatments to enhance the body’s natural healing abilities. The company’s goal is to promote healing through minimally invasive treatments that are clinically effective and cost efficient. The company’s product line is focused on the skeletal system, with products to enhance bone healing, joint therapies, and bone graft surgical procedures. Bioventus has a presence in 30 countries around the world. In February of this year, Bioventus held its IPO, setting the initial price of the shares in the $16 to $18 range. When shares started trading on the NASDAQ on February 11, the opening price was $13, below the range. The company put 8 million shares on the market that day, and they closed at a price of $18.43. The sale grossed $153 million, with net proceeds of $104 million for Bioventus. The next big data point for investors will come on March 25, when Bioventus releases its 4Q20 and full year results. While these numbers will cover a period before the company’s IPO, the first quarterly report as a public company is always eagerly watched. Bioventus shares have slipped since they started trading – the stock is down 29% in its first month on the market. Goldman Sachs, however, thinks this new, lower stock price could offer new investors an opportunity to get into BVS on the cheap. In his note for Goldman, analyst Amit Hazan writes, “[We] see recent stock underperformance offering a solid entry point into a story that includes a notable portfolio of joint preservation opportunities, and broad M&A opportunities that should offer a high likelihood of upside to numbers in the years ahead.” The analyst added, “Key growth drivers include: a strong portfolio across the better growing segment of the HA market; market share opportunities in the bone graft market; a large direct sales force presence and network of independent distributors that can be leveraged as new products are introduced…” To this end, Hazan rates BVS a Buy and his $19 price target suggests a 42% one-year upside potential. (To watch Hazan’s track record, click here) Wall Street’s analysts clearly like BVS shares, as the 4 recent reviews are all Buys, making the Strong Buy consensus rating unanimous. The shares are currently priced at $13.33, and the $19.25 average price target implies an upside of 44% for the year ahead. (See BVS stock analysis on TipRanks) Salesforce.com (CRM) Next up, Salesforce, is one of the market’s biggest names in tech and marketing. The company is a leader in Customer Relationship Management (CRM), even taking its ticker from its leading products. Salesforce offers its customers cloud-based SaaS solutions for most of the front-end issues marketing departments cope with on a daily basis. Salesforce shares have gained 40% in the past 12 months, as the company’s products and business model have proven easily adaptable to the pandemic-driven move toward remote offices and virtual commuting. After flat revenues in 1Q20, the company showed top-line gains in each of the next three quarters, as well as year-over-year gains. In Q4, the most recent reported, the company beat the forecasts by wide margins. Top line revenue came in at $5.82 billion, above the $5.68 billion expected and up 20% year-over-year. EPS, at 28 cents, was a strong turnaround from the 28-cent loss recorded in 4Q19. Also in the fourth quarter, Salesforce continued in its moves to acquire and integrate the communications app Slack. The acquisition is worth $27.7 billion, and is expected to close by July 31 of this year. Covering Salesforce for Goldman is 5-star analyst Kash Rangan, who writes, “Salesforce remains poised to be one of the most strategic application software companies in the $1tn+ TAM cloud industry, in our view. With a broad and expanding platform that spans sales, service, ecommerce, marketing, BI/analytics, artificial intelligence, custom applications, integration, and collaboration, we view Salesforce as well positioned to capitalize on accelerated digital transformation spending…” Rangan puts CRM shares on his firm’s Conviction List, with a Buy rating. His $315 price target implies room for 45% upside growth this year. (To watch Rangan’s track record, click here) A tech company with the size and reach of Salesforce will always attract Wall Street’s attention – and CRM shares have 24 recent reviews on file. Of these, 19 are to Buy with only 5 to Hold, making the analyst consensus rating a Strong Buy. The average price target of $277.30 suggests a 28% upside potential from the trading price of $216.80. (See CRM stock analysis on TipRanks) Jamf Holding (JAMF) High-tech products – laptops, tablets, smartphones, and their accessories – have revolutionized the ways that we interact with each other, with our colleagues and customers, with our electronic devices. Jamf Holdings, a Wisconsin-based software company, specializes in producing IT administration products for Apple devices running macOS, iOS, iPadOS, and tvOS. Jamf’s products allow system administrators to manage groups of devices, create polices, restrict device features, and even activate remote features such as setup, lock, and wipe. Apple has been one of the market’s great growth stories in the past decade, and Jamf offers investors a way to piggyback on the tech giant. Jamf held its IPO in July of last year, and the shares quickly showed large gains. The 18 million shares put on the market started at $26 and gained 51% in their first day of trading. The company has also reported steadily increasing revenues since its IPO. 2Q20, the first quarter reported after the opening, showed $62 million at the top line; Q3 and Q4 showed $70.4 million and $76.4 million respectively. Earnings, as in many tech firms, show a net loss. In his coverage of JAMF for Goldman Sachs, analyst Rod Hall sees the company with a clear path forward. “We believe Jamf’s unique remote management solutions for Apple products should continue to benefit the company as remote working and study trends seem like they are here to stay… Jamf noted that its outperformance in Q4 was driven by a broad-based demand with >25% Y/Y growth across every product, geography and major industries,” Hall noted. Hall puts a Buy rating on Jamf’s stock, along with a $52 price target that indicates a 40% upside potential for the shares. (To watch Hall’s track record, click here) The Strong Buy analyst consensus rating on JAMF is unanimous, based on 6 recent Buy-side reviews. The shares are priced at $37.01 and their $47 average price target suggests a ~27% upside for the next 12 months. (See JAMF stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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