‘Twas the night before Christmas, and all through the house, the investor was stirring, seeking the elusive perfect stocks to bring good cheer for holiday investing. TipRanks, a company that tracks and measures the performance of Wall Street’s market analysts, offers investors an array of tools to make that market search easy.
Start with the Stock Screener to find just the right stocking stuffer to bring you the returns you’re looking for. The screener’s filters narrow any search of the markets, taking the unwieldy mass of data from over 6,400 publicly traded companies and distilling it down to the few that meet your criteria.
For example, you can look for small to medium-sized companies, with upwards of 10% upside growth potential, and a Strong Buy consensus rating from Wall Street’s analysts. Add in an outperform prediction from the TipRanks Smart Score, and now you’ve got a much more manageable list of possible investments – 126, to be exact. Here are three that have shown excellent growth in the past 12 months and look primed to keep going in 2020.
Points International, Ltd. (PCOM)
Who doesn’t like a good reward? This is the simple fact behind all sorts of loyalty programs that companies offer as incentives for customers to stay active or expand their purchases. Points International is the leader in the loyalty industry, providing the services its business clients need to offer their customers the best possible reward programs.
PCOM’s 53% year-to-date gain clearly shows that the company has found a working niche in the business world. The stock’s most recent quarterly report showed slightly mixed results – but did not disrupt the shares’ price appreciation. Year-over-year, revenues gained 4% to reach $98 million, while EPS slipped from 10 cents to 8 cents. At the same time, the Street showed confidence in PCOM, as the stock gained 7% in the two days following the quarterly release.
The optimism in the stock is well explained by RBC analyst Drew McReynolds. In his review of PCOM released after the quarterly results were made public, McReynolds wrote, “Management expects a record Q4/19, reiterated 2019 guidance and 2022 financial targets that continue to sit well above our forecast, and sees an inflection point in the business with a record pipeline.” He added that “…any meaningful progress towards management's 2022 financial targets over the next 12-18 months, driven by new Loyalty Currency Retailing partners and incremental traction from Platform Partners and Points Travel, should translate to upside in the shares,” and reiterated his Buy rating on the stock. McReynolds’ $22 price target suggests an upside of 45%. (To watch McReynolds’ track record, click here)
Overall, PCOM’s Strong Buy consensus rating is unanimous, based on 3 Buy recommendations given since the Q3 results. Shares are selling at an affordable $15.19, and the $19.33 average price target suggests an excellent upside of 27%. (See Points International stock analysis at TipRanks)
Agilysys, Inc. (AGYS)
Hospitality has been one of the bright spots in the general economy in recent years, as rising employment and wages have made leisurely pursuits more affordable. Agilysys is a software company catering to the hospitality industry, offering products to manage properties, workforces, and documents, as well as inventory and procurement, marketing, and analytic solutions.
In 2019 alone, AGYS has seen 78% growth. This sort of momentum helps investors overlook a lot of potential flaws – such as the company’s regular net losses in quarterly earnings. Revenues in the most recent quarter, however, grew 19% year-over-year to $40.72 million and came in ahead of the forecast. The revenue was broad-based, coming from the company’s recurring, product, and professional services sources.
Fast growing sales numbers with a firm foundation are sure to draw positive attention, and 5-star analyst George Sutton, of Craig-Hallum, was attracted to AGYS stock. He wrote of the shares when he initiated his coverage, “We believe the company is in the early innings of becoming a world class enterprise software provider, and the revenue and EBITDA profile will begin to reflect that over the next few years. As Agilysys continues to accelerate growth and expand its margin profile, we believe it will hit a long-term 40-point profile, which should result in a 6.5x multiple, ultimately resulting in a $50 valuation.”
For now, Sutton puts a $32 price target on the stock to back up his Buy rating. This implies a 12-month growth potential of 25%. (To watch Sutton’s track record, click here)
AGYS, like PCOM above, has a Strong Buy consensus view based on 3 recent Buy ratings. This stock sells for $25.58, and the average price target suggests 29% potential on the upside. (See Agilysys stock analysis at TipRanks)
Frontline, Ltd. (FRO)
From customer loyalty and hospitality, we now take a turn to a heavier industry. Frontline is the world’s largest operator of oil tankers, with its main effort focused on the transport of crude oil. Based in Bermuda, Frontline owns a fleet of 70 tankers that are operated by separate management companies. The company’s ships include 28 ‘Suezmax’ vessels – the largest tankers capable of transiting the vital Suez Canal.
The energy industry normally oozes cash, but in the last quarter FRO reported a net loss of $10 million. This translated to 6 cents per share – but it beat the forecast, which had called for an EPS loss of 8 cents. Lower oil prices and higher fuel prices impacted the company. Despite the loss, Frontline still paid out its quarterly dividend, a 10-cent per share reward for patient investors. The dividend, while small in absolute value, represents a 3.4% yield – more than 50% higher than the average yield of S&P-listed companies.
One bad quarter did not derail FRO’s share appreciation momentum. The stock is up a whopping 125% in 2019. The growth reflects the constant necessity of oil in the modern economy, despite low crude prices, and Frontline’s leading position in the oil transport system.
Jonathan Chappell, 4-star analyst from Evercore ISI, is bullish on FRO, seeing the company in a strong position to improve cash flow and raise the dividend going forward. He writes, “We believe FRO’s fleet is well positioned to generate material cash flow from the forecasted tanker market upturn, and with its capital structure improving we believe dividend payouts can be more robust going forward. We are raising our payout ratio projection to 60% (from 50%), and thus now estimate a 2020 dividend of $1.42/share.” In line with this estimate, he set a price target of $14 per share, implying a 13% upside, and maintained his Buy rating. (To watch Chappell’s track record, click here)
Taking an even more bullish view is BTIG analyst Gregory Lewis, who is optimistic about the tanker industry as a whole. He sees FRO as the leader in its niche, and to back up his Buy rating he raised his price target from $12 to $18. This implies an impressive 45% upside to the stock. (To watch Lewis’ track record, click here)
Frontline stock backs its Strong Buy consensus rating with 4 recent Buy reviews from the analysts. The average price target, $14.75, suggests an upside potential of 18% from the current trading price. (See Frontline stock analysis at TipRanks)