Growth investors are constantly looking for the next massive gainer. We mean the stocks that not only have a proven track record for growth but also exhibit strong long-term growth prospects that could yield high rewards in the years to come.
While it’s often tempting to turn to more mainstream names like Apple, these better-known stocks don’t always offer the most upside from the current share price. In this case, stocks that have slipped away from investors' radars can represent more compelling investments as their biggest gains could still be on the way.
That being said, finding these under-the-radar names that are poised to skyrocket can seem like a daunting task to even the most seasoned investors. Luckily, TipRanks’ Smart Score tool makes it a little easier. Using the tool, we were able to pinpoint 3 lesser-known stocks primed to take off.
Teleflex develops and manufactures single-use medical devices such as products used for anesthesia, fluid management as well as hand-held instruments. While experiencing a rocky last few months, several analysts believe TFX is well positioned to deliver high returns.
Part of the medical device company’s appeal lies with its UroLift product. The system, which is a minimally invasive technology for treating lower urinary tract symptoms due to benign prostatic hyperplasia (BPH), has been approved by the FDA and has been used to treat over 100,000 men globally. With TFX placing the available market opportunity in the U.S. at $6 billion due to the fact that 1.5 million men with BPH have abandoned treatment, UroLift is expected to continue to fuel significant revenue.
Additionally, its new MANTA vascular closure device looks especially promising. With the full launch of MANTA slated for 2020, Jeffries analyst Raj Denhoy believes TFX has a “best-in-class reported and organic top-line growth profile relative to peers”. He added, “With TFX now positioned as one of the better positioned mid-cap hospital supply providers, the company is now increasingly attractive to larger diversified medtech peers."
As a result, the five-star analyst reiterated a Buy rating and $415 price target on TFX stock. Based on Denhoy's price target, shares could surge 29% over the next twelve months. (To watch Denhoy’s track record, click here)
Similarly, the rest of the Street takes a bullish approach when it comes to TFX. 6 Buy ratings and 1 Hold give the stock a ‘Strong Buy’ analyst consensus. Its $397 average price target suggests 24% upside potential. (See Teleflex stock analysis on TipRanks)
DuPont de Nemours (DD)
It’s no question that the chemical company has received its fair share of negative attention in recent years. Nonetheless, DuPont shares could get a lift thanks to its focus on active portfolio management.
Management believes synergies resulting from recent M&A activity could drive substantial gains in terms of revenue. On October 3, DD announced that it had agreed to acquire the Memcor business from Evoqua Water Technologies Corporation. As a result of the deal, Dupont will get access to Evoqua’s ultrafiltration and membrane biofiltration technologies. This acquisition comes on the heels of an earlier agreement with BASF to acquire the ultrafiltration membrane segment of the business.
Not to mention the company should see cash flow improve following the sale of its Compound Semiconductor Solutions business.
Bearing this in mind, Morgan Stanley analyst Vincent Andrews sees DD’s potential 12-month gain falling at 28%, as he reiterates an Overweight rating and $85 price target. (To watch Andrews’ track record, click here)
“We remain of the view that: 1) A ~$100 per share bull case exists should the company achieve max strategic value creation with its four generally unrelated segments; 2) The current share price does not price in any strategic value creation, but rather a typical conglomerate discount,” Andrews noted.
Wall Street anchor a bullish perspective on the chemicals maker, as TipRanks analytics showcase DD as a Moderate Buy. Based on 12 analysts polled by TipRanks in the last 3 months, 8 rate DD a "buy," while 4 say "hold." The 12-month average price target stands at $80.82, marking a nearly 20% upside from where the stock is currently trading. (See DuPont stock analysis on TipRanks)
Originally the agricultural component of DowDuPont, Corteva is now a separate company specializing in agricultural chemicals and seeds. With shares dipping 8% in the last month, Deutsche Bank’s David Begleiter argues that the drop represents a unique buying opportunity.
The company has recently added a new bundling program called Corteva Cash, with the product already proving to be successful. The bundling program gives seed purchasers a cash credit that can be used to buy pesticides from Corteva. As a result, there has been an uptick in purchases of CTVA pesticides from farmers.
In addition to Corteva Cash, the company has placed a significant focus on improving its productivity levels. CTVA recently announced the launch of its “Execute to Win” productivity program to fuel $500 million of EBITDA over the next five years. A new ERP platform is also being put into place in order to address excess costs from its three disparate IT systems including DuPont Crop Protection, Pioneer and Dow Agrosciences, as well as simplify business operations.
All of this lends itself to Begleiter’s conclusion that CTVA’s 2x EBITDA discount to FMC Corporation is “unwarranted”. “With double-digit EBITDA growth over the next 3-4 years largely in its own control (due to its substantial cost synergies and productivity initiatives) and valuation compelling versus its closest peer, we reiterate our Buy rating,” he commented. Along with his Buy rating, the five-star analyst set a $35 price target, indicating 37% upside potential. (To watch Begleiter’s track record, click here)
Overall, the agricultural chemical maker has had 3 bullish analysts in its corner over the last three months, along with 2 neutral analysts. Importantly, the 12-month average price target of $33,40 showcases 25% in upside potential for the stock.