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Every rule has an exception, and a key to successful investing is knowing when to follow the rule – and when to follow the exception. So, while it’s true that past performance won’t ensure future gains, stocks that have shown strong and sustained gains, frequently show that past gains can build up a reliable momentum for further gains.
The key is in the profile. Investors can look for stocks that offer a combination of two factors: strong, sustained gains and highly optimistic ratings from Wall Street’s analysts.
Based on that profile, we’ve pulled up two stocks using TipRanks’ database. Both have shown great momentum in the past year, and amassed enough bullish calls from analysts to be given “Strong Buy” consensus ratings. Let's take a closer look.
Protagonist Therapeutics (PTGX)
We’ll start with Protagonist Therapeutics, a clinical-stage biopharmaceutical company focused on developing novel treatments for significant unmet medical needs – in other words, new medications that will treat serious conditions which have no current effective treatment. Protagonist uses a proprietary platform to create peptide-based new chemical entities with potential to transform existing treatments. The company has three agents in various stages of clinical trials, for several diagnoses, including blood conditions such as polycythemia vera (PV) and hereditary hemochromatosis (HH), and inflammatory autoimmune conditions like ulcerative colitis and Crohn’s disease.
The blood disorder track in Protagonist’s pipeline features rusfertide, PTG-300, which has completed the Phase 2 trial and the company held an end-of-Phase 2 meeting with the FDA. The Phase 3 trial for polycythemia vera is scheduled for initiation early next year.
On the inflammatory autoimmune track, PN-943, a potential treatment for ulcerative colitis, is undergoing a 150-patient Phase 2 trial scheduled for completion next year. Meanwhile, PTG-200, a drug designed to treat Crohn’s disease, is currently enrolling patients for the Phase 2a study.
Protagonist’s share performance reflects the steady progress of its pipeline. The stock has gained an impressive 112% over the past 12 months, and is currently trading at all-time high levels.
The company will be presenting data on the PV clinical trial for rusfertide next month, but preliminary info is available, and Piper Sandler analyst Yasmeen Rahimi notes several positive aspects of the results.
“We were pleased to see spectacular data from the Phase 2 Part 1 study of rusfertide in 35 patients with PV… Of the 35-patient dataset, we highlight that 16 patients had low-risk PV (31-75 years old) and 19 patients with high-risk PV, demonstrating the broad applicability of rusfertide," Rahimi noted.
The analyst added, "Multiple inflection points expected to move PTGX shares up in next 7 months; May and June are key dates for EHA and opportunity for PTGX shares to increase 10-30%... HH is underappreciated, not built into valuation and presents significant upside on data in 2H21 in our view... PTG-300 durability and dosing frequency at ASH abstract (Nov. 4, 9:00) release could move shares."
Anticipating further good news from Protagonist, Rahimi rates the stock an Overweight (i.e. Buy), along with a $53 price target. Shares could appreciate by 57%, should the analyst’s thesis play out in the coming months. (To watch Rahimi’s track record, click here)
It's worth pointing out that Wall Street analysts are unanimous in their endorsement of PTGX. The stock has been endorsed with Buy ratings by all 4 of the analysts who have voiced an opinion over the past three months. Meanwhile, the consensus estimate of analysts polled is that PTGX should rise ~27% to hit $42.75 within a year. (See PTGX stock analysis on TipRanks)
Ranpak Holdings Corp. (PACK)
Let’s switch gears, and take a look at an industrial stock. Ranpak is a packaging company, producing boxes and packing material for e-commerce and industrial supply chains. Sounds simple, but Ranpak offers a twist, using an environmentally sound process in manufacturing, creating renewable, biodegradable, and recyclable products that can help to alleviate the deluge of plastics-based debris that litters our landscape.
Looking at some numbers, we find that Ranpak has an impressive position in its industry. The company has over 400 patents for enhanced and innovative products, a global customer base of more than 30,000 end users in 50 countries, and over 120,000 installed machines using Ranpak products.
The most impressive number, however, may be the share appreciation. Ranpak’s stock has grown by leaps and bounds this year, as the expansion in e-commerce during the pandemic period boosted demand for packing materials. PACK shares are up by 227% over the past 12 months.
Earlier this month, Ranpak reported its 1Q21 financial results. Top-line revenue in the first quarter grew 38% year-over-year, to reach $87.7 million. Quarterly net income improved even more dramatically, from a $3.6 million loss one year ago to a $6.3 million profit in the current report. Supporting these gains was a 12% increase in packaging system placement, with the installed base of Ranpak machines reaching 120,700 by March 31 of this year.
Among the bulls is 5-star analyst Greg Palm, of Craig-Hallum, who lays out a clear, upbeat case for Ranpak shares.
“For the second quarter in a row, Ranpak handily beat estimates on accelerating revenue growth and continued margin expansion. We aren’t aware of too many industrial-related companies with this level of growth and margin structure, which is why we continue to recommend shares to investors. The shift to sustainable packaging solutions has accelerated meaningfully in Europe and we suspect that these same trends will start to benefit results in North America as we progress throughout 2021,” Palm opined.
To this end, Palm rates the stock a Buy, and his $28 price target indicates confidence in 17% upside potential for the year ahead. (To watch Palm’s track record, click here)
Overall, Ranpak gets a unanimous rating from the analyst consensus. There are 3 positive reviews on record, supporting the Strong Buy view. PACK shares are priced at $23.89 with an average price target of $26.33, for a 10% one-year upside. (See PACK stock analysis on TipRanks)
To find good ideas for growth 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.