While 2019’s market performance broke records, Wall Street is less optimistic about 2020. The pros foresee those gains leveling off in coming months and a possible year-end cumulative increase of just 3% to 5%. Even though that would bring a profit to investors, it’s nothing to write home about.
However, it’s important to remember two things: first, that is just a projection, and second, it’s based on the average upsides of an array of stocks. Which means, of course, that some stocks are going to have a much higher upside potential – and since there is no ceiling on that, it will still be possible to find investment opportunities with considerable upside.
With this in mind, we’ve used the Stock Screener tool from TipRanks to sift through the 6,500 stocks in the platform’s database to find some of those likely winners. Each of the three stocks below has received at least one review from a top analyst suggesting an upside of 20% or more. Let’s dive in and look at the details.
Aspen Aerogels, Inc. (ASPN)
First on our list is a company in an unfamiliar niche. Aspen Aerogels manufactures and markets a variety of industrial insulation products. In this day of ever-increasing concern for environmental conservation, insulation technology will become more and more important – by nature, effective insulation increases the efficiency of any energy consuming process. Aspen’s products have applications in petrochemical refining, LNG storage, power generation, subsea offshore pipelines, as well as the building and construction sectors.
The value of the company’s niche can be seen in the stock’s runup during 2019: ASPN shares gained a whopping 250% last year, starting on January 2 at $2.22 and finishing December 31 at $7.76. While the pace of gains has cooled since then, the stock is still up 7% in 2020.
Looking ahead, the company has guided a net loss of 4 cents per share for Q4 2019. While in the red, this figure continues a sequential trend of declining quarterly losses. In Q3, ASPN beat the expectation of an 11-cent loss, reporting 9 cents. The company’s Q4 earnings release is scheduled for February 20.
Chip Moore, 5-star analyst with Canaccord Genuity, sees plenty of strength in ASPN. In his comments on the stock, Moore writes, “Aspen Aerogels is a leading provider of high-performance aerogel-based insulation products to energy and industrial markets. The company’s proprietary technology offers better performance and total value versus traditional products. We continue to favor the long-term opportunity despite the challenging macro backdrop here.”
To support his Buy rating, Moore increased the price target to $12, suggesting an upside potential of 45%. (To watch Moore’s track record, click here)
ASPN shares hold a Strong Buy consensus rating, based on 4 Buy ratings and 1 Hold. Shares are selling for $8.27, a remarkably low cost of entry for a stock with such a high potential upside – the average price target of $12 matches Moore’s, given above. (See Aspen stock analysis on TipRanks)
Alphabet, Inc. (GOOGL)
Next up on our list needs no introduction. Alphabet is the parent holding company set up to own and operate Google, its main subsidiary. The corporate restructuring was completed in 2015. In trading since then, Alphabet has nearly tripled in value. In 2019, GOOGL shares gained 28%, matching the S&P 500 index and outperforming the Dow Jones by a wide margin.
GOOGL pays no dividend, so investors’ gains are determined by share appreciation and corporate earnings. The company is expected to show an EPS of $12.76 for Q4 2019, to be reported on February 3. In three of the last four reported quarters, GOOGL has beaten the estimates. The company posted $136.8 billion in revenues for calendar year 2018, and is on track to exceed that figure for 2019.
Aegis Capital analyst Victor Anthony, a 5-star analyst ranked #94 overall in the TipRanks database, sees GOOGL shares reaching $1,800 in the next 12 months. Appreciation to that level will translate to a gain of nearly 26% from current trading levels. (To watch Anthony’s track record, click here)
Anthony published a research report on January 28 in which he reiterated his Buy rating on the stock, and said in his summary, “[W]e became more positive on Google's fundamentals across Search, YouTube, and Cloud, and see the shares outperforming the market this year, despite the regulatory risks, margin concerns, and competition for ad dollars. Our valuation reflects the increased estimates… due to our increased conviction in the continued strong growth of the core operating businesses.”
With 27 recent ratings, including 24 Buys against just 3 Holds, GOOGL stock is a Strong Buy in the analyst consensus view. The fact that the consensus is more conservative than Anthony’s outlook is clear based on the average price target, which at $1,553.21 suggests an upside of just 8%. (See Alphabet stock-price forecast on TipRanks)
Cytosorbents Corporation (CTSO)
Last on our list is a biotech company, which should not come as a surprise as the space is well-known for boasting sky-high upside potentials. Cytosorbents develops blood purification technology based on porous polymer beads that remove harmful substances from the bloodstream. The technology has the potential to revolutionize the treatment of kidney disease, rendering current invasive dialysis procedures obsolete.
Biotechs may be known for their high upside potential, but they’re also known for the hefty losses that companies frequently incur before achieving those upsides. The combination of huge overhead expenses and very long runup times before products are available for market cause the losses. Patient investors, however, endure them because the rewards are often impressive – when new drugs or medical technologies hit the markets, the combination of patient interest and patent royalties can bring massive returns.
Even the expectation of a profitable medical breakthrough can boost shares. CTSO has gained 28% in January, just on early news reports of its blood cleansing technology. And that expectation can bring the love from Wall Street’s analysts.
Writing from B. Riley FBR, Andrew D’Silva says, “We believe 4Q19 saw the initial benefits of CTSO substantially increasing its German sales force, as the company more than doubled the number of customer-facing sales reps it had in the region, while concomitantly increasing/establishing its presence in other direct sales regions. We anticipate CTSO will see a more significant benefit for new direct sales hires in 2020 as most additions were onboarded in 2H19. We believe the market opportunity for CTSO in Germany alone is immense. For example, CTSO generates well over $1 million in sales from one hospital in Germany.”
D'Silva is quick to see the sales potential in Cytosorbents’ products, and gives the stock a Buy rating with a $12 price target. His target shows the extent of his confidence in this stock – it indicates room for a 143% share gain in the coming year. (To watch D’Silva’s track record, click here)
CTSO has only 3 recent analyst reviews, but all are Buys, giving this stock a Strong Buy consensus rating. Shares sell for just $4.94, and the average price target of $11 implies an upside of 123%. (See Cytosorbents price targets and analyst ratings on TipRanks)