A $100,000 or even $200,000 balance in a 401(k) plan might seem like a lofty amount of money — and it is — but it may not mean as much in your retirement as you think. As part of the new Secure Act, plan sponsors will have to show Americans how their account balances translate into monthly income. The new retirement law, which was passed in December, aims to provide investors with a clearer picture about whether or not they’re on track to retire.
Many income-focused investors dwell on dividend yield and buy largely on that basis. Not so, say the two dividend-minded mutual-fund managers who run the outperforming Guinness Atkinson Dividend Builder Fund (GAINX) . Matthew Page and Ian Mortimer use a much more nuanced approach to get high-achieving results.
Stock in the electric-vehicle pioneer rose back above $900 a share after an analyst at Piper Sandler raised his target for the price to the highest on Wall Street.
As coronavirus fears run rampant throughout the world, investors are turning to Wall Street titans for guidance, namely Ray Dalio. Founding hedge fund Bridgewater Associates in 1975, the firm now boasts $160 billion worth of assets under management, with Dalio alone estimated to be worth $18.7 billion.Dalio, who has looked at the impact of past pandemics and virus outbreaks on the market, called the current reaction to the coronavirus overblown, noting that the concerns “probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that...” He added, “It most likely will be something that in another year or two will be well beyond what everyone will be talking about.”While the billionaire does acknowledge that it’s difficult to gauge what the full extent of the virus will be, he argues that diversifying across currencies, asset classes and geographical regions could prove to be the best strategy. Additionally, Dalio believes investors should pay attention to issues related to wealth and political gaps, the emergence of China, technology and the environment that could emerge from the public health crisis.“What concerns me most if you did have a downturn -- we are now 11 years in expansion -- whether that’s one, two, three years forward, with the larger polarity that exists, the wealth gap and the political gap,” Dalio commented.Looking into Bridgewater’s basket of stocks, we’ve chosen three of the fund’s new holdings that TipRanks’ Stock Screener reveals as “strong buys." Not to mention each has a top Smart Score, at least an 8 out of 10. Let’s take a closer look and see what Wall Street analysts have to say.BlackRock Inc. (BLK)On Wall Street, BlackRock is known as one of the largest asset managers in the world. Pulling the trigger on BLK in the fourth quarter, Bridgewater purchased over 32,000 shares for $16.1 million.Following the company’s solid quarterly performance, several analysts also see the stock as a Buy. In Q4, BLK posted EPS of $8.34, well above the $7.66 consensus estimate. In addition, long-term inflows surpassed the Street’s $82 billion projection, landing at $99 billion or a 6.1% annualized pace. While higher opex led to an operating margin compression of 254 basis points to 43.5%, Morgan Stanley’s Michael Cyprys thinks the print was positive overall.“4Q19 results this morning demonstrate BLK's ability to continue delivering strong organic growth,” the four-star analyst explained. On top of this, he pointed out, “Debunking ‘too big to grow fears,’ BLK delivered 7%-plus organic asset growth for the full year 2019, which is an acceleration from 2.1%-plus organic growth in 2018 and 4.3%-plus average growth rate over last five years. Importantly, strong net new money growth translated into 5% organic base fee growth in 2019, better than the 2% growth in 2018.”Based on this report, Cyprys expects other analysts to make adjustments to their outlooks for 2020. “Higher AUM levels, better fee rate, and strong organic growth trajectory should support upward revisions to consensus EPS, despite higher core G&A expense guidance into 2020,” he noted.With the company also hoping to receive the board’s approval for a dividend increase, the deal is sealed for Cyprys. In line with his bullish take on the financial stock, he left both his Overweight rating and $603 price target unchanged. Should the target be met, a twelve-month gain of 7% could be in the cards. (To watch Cyprys’ track record, click here)In general, the rest of the Street is on the same page. With 7 Buys and 2 Holds received in the last three months, the consensus rating comes in as a Strong Buy. (See BlackRock stock analysis on TipRanks)Citigroup Inc. (C)Dalio’s second new position was in financial services giant Citigroup. In the fourth quarter, Bridgewater spent $36.1 million to acquire a stake in the company, or 452,049 shares to be exact.Weighing in on the company for Oppenheimer, five-star analyst Chris Kotowski points to its fourth quarter results as an encouraging sign. Even though there was a $0.25 discrete tax benefit, at $1.90, core underlying EPS still exceeded both the analyst’s estimate of $1.80 and the $1.81 Street forecast. In terms of revenue, Citigroup reported a beat, with the $18.4 billion figure representing a 7.3% year-over-year gain.It should be noted that growth and seasoning in the consumer portfolio drove a 15.2% year-over-year credit cost increase. However, Kotowski argues that this was widely expected, with the $2.2 billion total provision landing very close to his $2.1 billion prediction.When it comes to the fact that average shares dropped 9.8% year-over-year, reflecting a loss of 29% from the peak, the analyst commented, “Skeptics often tell us that ‘the market doesn't pay you for buybacks,’ but clearly this has greatly enhanced the company's long term earnings and dividend paying capacity. While we suspect this year's $18 billion of repurchases was a peak, we see $16 billion in 2020 and $12 billion in 2021.” If these repurchases play out, by year end 2021, another 15%-plus shrinkage in the share count would be realized.That being said, Kotowski believes that the upward trend for return on average tangible common stockholder's equity (ROTCE) is especially promising. “Excluding various gains and tax benefits in both years, we would put the "core" ROTCE at ~11.2% for the year, up from 10.5% in 2018 and 8.9% in 2017. Thus, the trend remains up and to the right, which is in our view the main thing that drives bank stocks,” he stated.All of the above factors prompted the Oppenheimer analyst to maintain an Outperform call and $124 price target. This conveys Kotowski’s confidence in Citigroup’s ability to climb 57% higher in the next twelve months. (To watch Kotowski’s track record, click here)What do other analysts think about Citigroup’s long-term growth prospects? As it turns out, the rest of the Street is generally bullish, with its Strong Buy consensus rating breaking down into 10 Buys vs 3 Holds. Not to mention the $94.82 average price target brings the upside potential to 21%. (See Citigroup stock analysis on TipRanks)CarMax Inc. (KMX)Bridgewater also snapped up shares of CarMax, the largest used car retailer in the U.S. The famous hedge fund added a position of 60,342 shares, valued at $5.3 million. Out on Wall Street, analysts are also excited about KMX.After hosting members of the company’s management team, Morgan Stanley’s Armintas Sinkevicius remains optimistic about its long-term growth narrative. During the meeting, management said the omni-channel experience rollout has already been successful, and there has been little core business disruption. In the future, the company will continue to seek out opportunities from efficiencies at the Customer Experience Centers and strengthen customer interaction.Based on this Sinkevicius commented, “We are constructive on the ability of Carvana and KMX to disrupt the used car dealership model, but find the profitability, free cash flow, and valuation at KMX to be significantly more attractive.” To this end, the analyst sided with the bulls, keeping the rating as Overweight. At $112, the price target implies shares could surge 13% in the next twelve months. (To watch Sinkevicius’ track record, click here)Meanwhile, RBC Capital analyst Scot Ciccarelli cites KMX’s recent $50 million investment in Edmunds, a research site that offers in-depth reviews of new vehicles, insights and helps shoppers progress through the entire car purchasing process, as being the source of his bullish thesis. He argues that this move is low-risk and possibly high-reward as KMX could use Edmunds’ reviews on its own website.“Further, if Edmunds and their ‘millions of customers a month’ were to provide direct links to CarMax inventory, this should also generate a substantial number of new online sales leads – which CarMax can now accommodate because of their growing omni-channel capabilities. Third, CarMax may be able to learn what the ‘value algorithms’ are searching for in their grading scale and may be able to work towards improving their third party value rankings,” Ciccarelli added. It makes sense, then, that the five-star analyst reiterated his bulllish call and $108 price target. (To watch Ciccarelli’s track record, click here)Looking at the consensus breakdown, a majority of Wall Street analysts also have high hopes for the used car retailer. With 8 Buys and 2 Holds, the word on the Street is that KMX is a Strong Buy. Additionally, the $106.88 average price target indicates that a possible twelve-month gain of 8% could be in store. (See CarMax stock analysis on TipRanks)
Shares of General Electric Co. rose 1.3% in morning trading, as investors took comments from Chief Executive Larry Culp about pressure on cash flows in the first quarter in stride, as the full-year outlook was maintained. Culp said earlier at the Barclays Industrial Select Conference that in light of the Boeing Co. 737 MAX "dynamics" this year, and with the outbreak of the coronavirus in China a "wild card," that he expects first-quarter free cash flow to be "in the range of negative $2 billion," according to a FactSet transcript. He said, however, that a "snap back that we know is inevitable" as the 737 MAX grounding issues are expected to be resolved in the second half of the year, so he still expects full-year FCF in the range of positive $2 billion to $4 billion. The stock, which had lost 3.1% over the past three days since closing at a 19-month high of $13.16 on Feb. 12, has rallied 12.3% over the past three months, while the Dow Jones Industrial Average has gained 5.0%.
Walmart announced fourth-quarter earnings that missed expectations, and said coronavirus could hurt first-quarter earnings per share.
Tax brackets can hurt taxpayers if they don't understand how they work. The IRS typically issues new tax brackets annually that affect your earnings.
(Bloomberg) -- A growing number of China’s private companies have cut wages, delayed paychecks or stopped paying staff completely, saying that the economic toll of the coronavirus has left them unable to cover their labor costs.To slow the spread of the virus that’s claimed more than 2,000 lives, Chinese authorities and big employers have encouraged people to stay home. Shopping malls and restaurants are empty; amusement parks and theaters are closed; non-essential travel is all but forbidden.What’s good for containment has been lousy for business. With classes canceled at a coding-and-robotics school in Hangzhou, employees will lose 30% to 50% of their wages. The Lionsgate Entertainment World theme park in Zhuhai is closed, and workers have been told to use up their paid vacation time and get ready for unpaid leave.“A week of unpaid leave is very painful,” said Jason Lam, 32, who was furloughed from his job as a chef in a high-end restaurant in Hong Kong’s Tsim Sha Tsui neighborhood. “I don’t have enough income to cover my spending this month.”Across China, companies are telling workers that there’s no money for them -- or that they shouldn’t have to pay full salaries to quarantined employees who don’t come to work. It’s too soon to say how many people have lost wages as a result of the outbreak, but in a survey of more than 9,500 workers by Chinese recruitment website Zhaopin, more than one-third said they were aware it was a possibility.The salary freezes are further evidence of the economic hit to China’s volatile private sector -- the fastest growing part of the world’s second-biggest economy -- and among small firms especially. It also suggests the stress will extend beyond the health risks to the financial pain that comes with job cuts and salary instability. Unsurprisingly, hiring has all but ground to a halt: Zhaopin estimates the number of job resumes submitted in the first week after the January outbreak was down 83% from a year earlier.“The coronavirus may hit Chinese consumption harder than SARS 17 years ago,” said Chang Shu, Chief Asia Economist for Bloomberg Intelligence. “And SARS walloped consumption.”By law, companies have to comply with a full pay cycle in February before cutting wages to the minimum, said Edgar Choi, author of “Commercial Law in a Minute” and host of a legal-advice account on WeChat. For companies that aren’t making enough to cover payroll, it’s permissible to delay salaries, as long as staff get the money they’re owed eventually.Choi said he’s heard from thousands of foreign workers who say their payments have been cut in half this month or halted althogether. That, he said, is illegal. “A lot of these employees are foreigners, they don’t know Chinese,” he said. “Whatever their boss tells them, that’s it. It’s easy for them to get bullied.”NIO Inc., an electric car-maker based in Shanghai, recently delayed paychecks by a week. The company’s chairman William Li also encouraged employees to accept restricted stock units in lieu of a cash bonus.At Foxconn Technology Group’s Shenzhen factory, workers returning from the Lunar New Year break are quarantined in the dorms before they can return to work. They’re getting paid, but only about one-third of what they’d earn if they were working.Without full, regular paychecks and few places to spend them these days anyway, Chinese consumers could cut spending in some categories to zero, said Bloomberg’s Shu. And it may not bounce back: For example, she said, if you skip your daily latte for two months, you’re not likely to make up for those missed drinks later in the year.With limited reserves and less by way of remote technologies, the smaller companies that underpin China’s vast private sector are particularly vulnerable. Among broader efforts to help firms stay afloat, policy makers have called on state-run banks to make loans at cheaper rates to small businesses in particular.In the case of Pei Binfeng, co-founder of the Hangzhou coding and robotics academy, the outbreak forced them to suspend all in-person classes for students in kindergarten through grade 12. With the loss of revenue, the company will withhold 50% of salary for key executives and 30% for other employees until business resumes.“What we teach isn’t a must-have for a lot of parents, so expenses like this are usually the first to go when things get tough,” said Pei.Rick Zeng, deputy general manager at the Lionsgate theme park in Zhuhai, said they’ve been shut down on government orders since the end of January. Starting next week, some staff will need to go on unpaid leave.In the southeastern city of Fuzhou, hotel manager Robert Zhang said all but two or three of his 100 rooms are vacant on average nights. Two-thirds of the employees are effectively on furlough, getting some salary but not as much as they’re used to.“When there’s no business, there’s no performance-based salary,” he said. “For a month or two, the impact isn’t immediately obvious. But if the epidemic lasts and tourism doesn’t recover for three to four months, our employees will feel the crunch.”(Updates with job data in the sixth paragraph. An earlier version corrected Edgar Choi’s occupation)\--With assistance from Colum Murphy, Shirley Zhao, Bei Hu and Gao Yuan.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at email@example.com;Jinshan Hong in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Candice Zachariahs at email@example.com, Janet Paskin, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bausch Health Companies offered a mixed fourth-quarter report early Wednesday, sending shares of Bausch Health stock into a tumble, undercutting the bottom of a flat base.
When looking for the best artificial intelligence stocks to buy, investors should expand their search to unexpected fields. Salesforce.com and Trade Desk are among AI stocks on IBD's radar.
Democratic presidential candidate Mike Bloomberg unveiled a plan on Tuesday to crack down on Wall Street.
While the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite index hover near all-time highs, energy stocks have fallen on very hard times. Exxon Mobil (XOM) — the world’s most valuable public company as recently as 2012 — has seen its stock price plunge about 40% from its all-time high above $100 a share in June 2014, a loss of more than $180 billion in market capitalization. The Energy Select Sector SPDR ETF (XLE) the largest energy-sector ETF, is down by a similar amount from that date.
(Bloomberg) -- Groupon Inc. plummeted a record 38% to an all-time low after delivering worse-than-expected results and announcing plans to stop selling goods -- a retreat for a company that once aspired to be a major shopping service.Earnings declined to 7 cents a share last quarter, excluding some items, Groupon said on Tuesday. That missed even the most pessimistic Wall Street estimate. Sales also fell dramatically short of projections.The stock tumbled as low as $1.90 in New York trading Wednesday. The shares had been up 28% this year through Tuesday’s close, with investors betting that Groupon could mount a comeback.Groupon Goods, an e-commerce site for products like phone chargers and coats, was an attempt to attract new customers and decrease the company’s reliance on its core business -- selling daily deals and other discounts. But the business’s contribution to profit has been declining for four quarters, and consumers have lost interest, Groupon said. That’s why it plans to phase out the program this year.“Goods has outlived its role as a business driver and has become a significant drag on our business,” Chief Executive Officer Rich Williams said in a letter to shareholders.Groupon’s turnaround plan now hinges on relaunching the brand and kicking off a new marketing strategy, Williams said. The hope is to shift away from offering deals and be known as a marketplace where consumers can find local experiences.The goal is “being top of mind when our customers are looking for the best things to do around them, when they need something to do with their kids on the weekend or for when they’re planning date night,” he said.Groupon also named two new board members: Valerie Mosley, CEO of Valmo Ventures, and Helen Vaid, Pizza Hut’s chief customer officer. And it appointed interim Chief Financial Officer Melissa Thomas to the job permanently.And the board is proposing a reverse stock split at a ratio of between 1-for-10 and 1-for-12.To contact the reporter on this story: Nick Turner in Los Angeles at firstname.lastname@example.orgTo contact the editor responsible for this story: Nick Turner at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Generation Investment, which is chaired by the former vice president, more than tripled its stake in cloud-communications firm Twilio in the fourth quarter. The shares are surging in 2020.
The best cybersecurity stocks are well-positioned in cloud-delivered services and Zero Trust protection. Amid expected shifts in corporate spending, firewall technology may play a lesser role.
Tesla’s (TSLA) stock price has doubled this year. Virgin Galactic’s (SPCE) stock price has nearly tripled in 2020. The world’s most profitable company, Apple (AAPL) withdraws its revenue guidance, and the technology-heavy Nasdaq Composite actually closes higher on the day.
‘There are several deferments and forbearances that can temporarily suspend the obligation to repay federal student loans.’
Household wealth compared to income is near a record high. Unemployment is near a record low. So why is the savings rate so high?
Renaissance Technologies, added more than 3 million shares of Tesla to its holdings in the fourth quarter of last year, as the electric-vehicle maker’s shares catapulted higher, according to public filings.
Worth $23 billion today, former math professor Jim Simons has become one of the most successful money managers of all time. Following his departure from the world of academia in 1978, he helped jumpstart the quant investing revolution using a data-driven approach and predictive algorithms. Armed with the skills and experience acquired as a mathematician and code breaker, Simons founded hedge fund Renaissance Technologies out of a Long Island strip mall in 1982.Relying on an emotionless and hard data-focused strategy, his track record has surpassed that of other Wall Street greats like Steve Cohen, Ray Dalio and Warren Buffet, whose 20.5% annualized gains since 1965 pales in comparison to Simons’ 39% average return over the last 30 years. Additionally, since 1998, its Medallion Fund has seen annual returns reach 66% before fees.Even though Simons doesn’t manage the Medallion Fund anymore, he remains a key player at Renaissance. Regardless, the man that pioneered a fundamentally different way of thinking about investing has left a lasting impact. Currently, 31% of all stock trading is done by hedge funds and other quant investors, with much of their efforts modeled after his approach.It follows, then, that after Simons’ fund goes in on a particular name, Wall Street focus locks in. With this in mind, we used TipRanks’ Stock Screener tool to get all the data on three Buy-rated healthcare stocks Renaissance boosted its position in during the fourth quarter. Here’s what we found out.Merck & Co., Inc. (MRK)Throughout the last 125 years, healthcare name Merck & Co. has become one of the major players in the space. While shares have slipped in the previous six months, Simons’ fund just pulled the trigger.According to the fund’s 13F filing, Renaissance bought 1,625,830 shares in the fourth quarter, reflecting a 41% increase. As its MRK stake now lands at 5,673,243, the total position is valued at almost $516 million.After its recent earnings release, analysts are also optimistic when it comes to Merck’s long-term growth prospects. In terms of non-GAAP EPS, the figure came in 1 cent ahead of the consensus at $1.16. Sales, however, missed the mark at $11.9 billion, which was $85 million below the Street’s prediction. MRK also revealed that it would be spinning off the women’s health, legacy brands and biosimilars into a NewCo.Weighing in on the company for Cantor Fitzgerald, Louise Chen writes that even though the print has caused investors to worry about slowing Keytruda sales, new data readouts for drugs that compete with MRK’s products and NewCo’s impact on EBITDA, the company is on track. The analyst highlights the fact that Keytruda, animal health, human health vaccines and overall worldwide sales all gained during the quarter. Not to mention through 2024, Merck expects solid revenue growth, which should accelerate thanks to the spin-off.“As a result of the incremental growth that NewCo is expected to achieve, combined with the benefit of ongoing operating efficiencies at MRK enabled by the spinoff, the company expects MRK and NewCo to realize higher combined non-GAAP EPS within 12-24 months post-spinoff,” Chen argued.Bearing this in mind, the analyst stayed with the bulls, reiterating an Overweight rating. At $107, the price target implies that a 30% twelve-month climb could be in the cards. (To watch Chen’s track record, click here)Meanwhile, Guggenheim’s Seamus Fernandez thinks the spin-off is the primary takeaway. “More important is today's news of the spin of the women's health, legacy brands and biosimilars into a NewCo, which we view as financially creative and potentially compelling, but further levers MRK to Keytruda. The strategic plan highlights MRK's conviction in its long-term growth prospects and, financially, we believe the decision makes sense long-term,” he explained. To this end, the five-star analyst left his Buy call and $105 price target as is. (To watch Fernandez’s track record, click here)Looking at the consensus breakdown, 6 Buys and 1 Hold add up to a Strong Buy consensus rating. With a $99.38 average price target, the upside potential is 21%. (See Merck stock analysis on TipRanks)AbbVie Inc. (ABBV)AbbVie is known for being a research-driven biopharma company developing treatments to improve the lives of patients around the world. In the most recent quarter, the famous quant shop bumped up its ABBV holding by 62% after it picked up almost 4.5 million shares. Valued at over $1.04 billion, its overall holding is now made up of 11.8 million shares.According to several members of the Street, the billionaire has more than enough reason to be optimistic. During the fourth quarter, management’s worldwide 2020 guidance for Skyrizi flew past the almost $1 billion consensus estimate at $1.2 billion. Not to mention for Rinvoq, more than 95% of commercial lives are now covered and both Imbruvica and Venclexta are still grabbing market share despite the steep competition. What’s more, ABBV unveiled 30 proof-of-concept candidates that could see data released in the coming three years.UBS analyst Navin Jacob points out that the print wasn’t all positive, citing the disappointing results for Orilissa and HCV, but stated that he is still very much on board. “Strong Q4 print and even stronger 1020 guide (in-light of ABBV's historical conservatism) provides confidence to back up TRx trends that we see weekly for Skyrizi and Rinvoq. We now expect ABBV to print more than $12 per share in 2021 EPS thus w/ dividend yield still at ~5% we think the stock will continue to work from here,” he explained.In addition, Jacob says that its early stage pipeline hasn’t been factored into his estimates, so a positive readout could lend itself to a re-rate. Based on all of the above factors, his recommendation remains a Buy. Adding to the good news, the analyst lifted the price target from $96 to $105, implying 12% upside potential. (To watch Jacob’s track record, click here)What do other analysts have to say about ABBV? It turns out that 5 out of 6 analysts that have published a recent review agree the stock is a Buy, making the consensus rating a Strong Buy. Given the $100.50 average price target, shares could surge 7% in the next twelve months. (See AbbVie stock analysis on TipRanks)Bristol-Myers Squibb (BMY)Simons’ fund also made a substantial purchase of pharmaceutical giant Bristol-Myers Squibb shares during the fourth quarter. With 11.9 million shares added, an 84% increase in the position’s size, Renaissance now owns over 60 million shares. All in all, the holding is worth a whopping $3.9 billion.Taking a look at BMY’s most recent earnings release, the company’s overall performance didn’t disappoint. Sales results were solid, and it didn’t announce any major surprises in terms of its initial guidance after the Celgene acquisition was finalized.As the healthcare company has $30 billion year end 2019 net debt and $18 billion of 2020 adjusted EBITDA, J.P. Morgan analyst Chris Schott believes that this year, it should be able to start deploying capital again. “Along these lines, the company announced an incremental $5 billion share repo program today. Overall, we see fairly meaningful capital deployment capacity for BMY over time and believe further tuck-in business development would be well received by the Street as the company looks to further build out its pipeline,” he noted.On top of this, Schott argues BMY’s pipeline is especially promising. “From here, we see the BMY story largely driven by a range of expected 2020 pipeline readouts (additional Opdivo readouts, TYK-2 phase 3, CELG pipeline updates), which if successful we see translating to upside to what we view as conservative out-year expectations. While the company clearly faces a challenging 2026-plus LOE cycle longer-term, we believe the company has a window to address these headwinds through a mix of its internal pipeline and business development,” he stated.It makes sense, then, that Schott raised the price target from $70 to $74 in addition to reiterating his Overweight call. This new target conveys his confidence in BMY’s ability to rise 12% over the next year. (To watch Schott’s track record, click here)Turning now to the rest of the Street, a Moderate Buy analyst consensus breaks down into 4 Buys and 2 Holds assigned in the last three months. Should the average price target of $71.60 be met, an 8% twelve-month gain could be on the horizon. (See Bristol-Myers stock analysis on TipRanks)
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
(Bloomberg) -- A number of stocks that have captured investor attention are continuing their gains as the options market more and more resembles a roulette wheel.Richard Branson’s space-tourism company Virgin Galactic Holdings Inc. jumped as much as 15% on Wednesday, marking another day of double-digit gains. Meanwhile, Plug Power Inc. rose as much as 8.9% to extend a five-year high as retail investors talked up their positions on message boards like r/wallstreetbets on Reddit. Fellow renewable energy equipment-maker FuelCell Energy Inc. rose as much as 17%.Tesla Inc., a favorite among retail investors, jumped as much as 7.8% after analysts at Piper Sandler Cos. raised their price target to the highest on Wall Street.As the four stocks extend their rallies, bets in the options market are also continuing to mount. Tuesday saw options volume that dwarfed historical averages, and that extended into Wednesday. As of 9:46 a.m. in New York, Tesla February calls that expire at the end of the week were among the most traded equity options.Much of the group’s rise in recent weeks has come without concrete news. Virgin Galactic is due to report a quarterly update next week.(Updates with share movement, options volume throughout.)To contact the reporter on this story: Bailey Lipschultz in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Catherine Larkin at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wall Street analysts’ wealth of experience and in-depth knowledge of the market can help investors determine whether to add a new name to a portfolio. Additionally, the use of technical indicators and fundamentals can point the direction of a stock’s near-term trajectory. Another way, though, is to gauge the sentiment amongst fellow investors. As the old saying goes, imitation is the sincerest form of flattery.TipRanks’ Stock Screener has a set of filters which allows you to search out a stock according to your needs, be it by market cap, analyst consensus or various other metrics. In our case, we searched for three tickers boasting “very positive” sentiment from top TipRanks investors – a readout of individual investor portfolios tracked by TipRanks on its Smart Portfolio platform.What’s more, in addition to piquing investors’ interest, all 3 have a further characteristic in common; all currently score a Strong Buy consensus rating from the Street. Let’s explore, then, why investors and analysts alike, are finding these names so compelling right now.Centene Corp (CNC)With a market-cap of $38 billion, Centene has established itself as a major player in healthcare services. The large cap has more than 33,000 employees across the country, has health plans that serve 12.3 million members in 29 states and offers health insurance to other healthcare and commercial organizations. With roughly 22 million members, Centene is the largest provider of government-sponsored health plans.The company’s recent earnings results were a mixed affair. Centene’s Q4 revenue came in at $18.9 billion, 14% up from last year’s $16.6 billion, while also beating the analysts' estimate of $18.43 billion. The company’s higher-than-expected medical benefit ratio (the percentage of health insurance premiums paid out in claims), though, was a disappointment for investors. At 88.4%, the figure came in higher than the Street’s estimate of 87.6% and impacted the company’s medical costs.Nevertheless, J.P. Morgan’s Gary Taylor believes CNC trades at a discount to its group. Multiple overhangs including the election, block grant and public charge, according to the analyst, “will all likely prove immaterial.” Taylor also believes Centene’s acquisition of WellCare for $17 billion in March of last year will lead to further long -term value creation.The 4-star analyst further said, “We believe that CNC remains a long-term growth story as managed care penetration of Medicaid grows from ~68% of spending towards 75-80% over the next decade. We believe CNC’s organic opportunity (primarily fueled by its Medicaid and Medicare exposure) certainly remains above-average for the sector.”Bottom line, then? Taylor reboots his rating on Centene with an Overweight along with a price target of $88. Should the target be met, investors stand to take home a 33% gain over the next year. (To watch Taylor’s track record, click here)Overall, the healthcare service specialist is getting a lot of healthy love from the Street right now. 13 Buys and a single Hold converge to a Strong Buy consensus rating. At $80.54, the average target implies possible upside of 24%.CNC has a ‘Very Positive’ investor sentiment with the number of portfolios holding CNC rising on both a 1 week and 1-month basis. (See Centene stock analysis on TipRanks)Applied Materials (AMAT)Next up is a fellow large cap, though from an entirely different sector. Semi-conductor company Applied Materials makes integrated circuit chips for a wide range of electronics, including TVs, smartphones and flat panel display screens. The $61 billion heavyweight’s robust start to 2020 is a direct continuation of 2019’s stellar performance; last year’s gains of 90% have been boosted by a further 9% year-to-date.As per expectations, AMAT’s latest earnings results delivered a strong quarter and guidance. F1Q20’s revenue of $4.16 billion indicated a quarter-over-quarter increase of 11% and beat the Street’s estimate of $4.11 billion. At $0.98, EPS came in above the high end of the company's $0.87-0.95 guidance and above the Street’s call for $0.93. Looking ahead, galvanized by a continued robust foundry/logic business and the return of some memory spending, AMAT expects to see "strong double-digit" growth in its semiconductor business this year.Deutsche bank’s Sidney Ho applauded the print and notes the guide would have been even stronger without the estimated $300 million impact of the coronavirus on its operations. Ho said, “AMAT continues to benefit from a robust foundry/logic environment and with this strength expected to continue throughout CY20, early signs of a memory recovery, and expectations for continued share gains, the company appears well positioned for a strong CY20… Post earnings, we remain encouraged by AMAT's near and long-term outlook and believe that the risk-reward for AMAT, which trades at ~12x (including pending acquisition) vs. its large cap peers at 1415x, is favorable.”The 5-star analyst, therefore, keeps his Buy rating intact, while raising his price target up from the previous $72 to $75. The new figure implies possible upside of 15% from current levels. (To watch Ho’s track record, click here)It turns out that the rest of the Street wholeheartedly agrees with the Deutsche bank analyst. With 19 "buy" ratings vs. 1 "sell" and 1 "hols," the message is clear: AMAT is a Strong Buy. Possible gains of 17% could be heading investors’ way should the average price target of $75.71 be met over the coming months.In addition, based on top investor portfolios in TipRanks’ database, 6.9% hold AMAT stock. On average, top investors allocate 3.7% of their portfolios to AMAT. This gives the stock its ‘Very Positive’ investor sentiment score. (See AMAT stock analysis on TipRanks)Microchip (MCHP)Staying in the semi-conductor field, we come across another big player in the shape of Microchip. This company does what it says on the tin: Sells microcontrollers, analog, and field-programmable gate array [FPGA] chips to a wide array of customers.With earnings season in full swing, Microchip has been posting results, too. The solid quarter exhibited a beat on revenue and earnings: MCHP reported sales of $1.29 billion, compared to the $1.26 billion estimated by the street. NonGAAP EPS came in at $1.32, above the street’s estimate of $1.26. For the current quarter, MCHP expects revenue of $1.36 billion, guiding above the street’s call for $1.33 billion.Needham’s Rajvindra Gill sees “multiple inflection points in MCHP's business.” The 5-star analyst notes the company has seen a continuation of strong backlog and bookings trends. Additionally, Gill notes MCHP’s ongoing strength in data center and industrial and auto, all recovering from a bottom, with the trends expected to continue in 2HCY20.Gill summarized, “We could envision an optimistic scenario where we see an inventory restocking, given the historical low levels of distribution inventory, combined with genuine demand pull through driven by data center, ADAS, industrial IoT and 5G. While lead times may extend, we do think MCHP has built enough capacity to support a return in demand. In that environment, we believe revenue could return to pre-downturn levels and grow from there. Moreover, we believe MCHP is on track to hit its LT GM target of 63% (vs. 61.7% MRQ) as the $16MM underutilization charges roll-off the P&L. Net, we see upside at current levels as we roll out our new FY22 Non-GAAP estimates."As a result Gill reiterated a Buy rating on MCHP shares, while raising his price target to $140 (from $130). The implication for investors? Potential upside movement of 30%. (To watch Gill’s track record, click here)The consensus breakdown provides further cheer; 15 Buys and 2 Holds coalesce to a Strong Buy consensus rating. With an average price target of $123.13, analysts expect an additional 15% to be added to the share price over the next year.Furthermore, 2.4% of all portfolios hold MCHP, with 0.2% being added in the last month alone. Top investors allocate, on average, 1.7% of their portfolio to the chipmaker’s stock. (See Microchip stock analysis on TipRanks)