4 Stocks Wall Street Loves This Year...And 4 It Doesn't
2014 was an eventful year on Wall Street with many ups and downs. Now that 2015 is here, many investors have been wondering which stocks they should jump on and which stocks they should avoid. But how are investors supposed to know which stocks those are?
TipRanks aggregates sell-side analyst ratings that have been published online and ranks these analysts based on their financial advice history so investors know who to trust.
So, which stocks are worth investing in and which stocks...aren't?
Facebook Inc (NASDAQ: FB)
Social media giant Facebook had quite a successful 2014 with its stock up more than 30 percent over the past 12 months due to the company’s acquisitions and increasing user growth. Facebook currently has 1.3 billion global users with 63 percent visiting the website on a daily basis.
In addition, Facebook recently released its fourth quarter and full year 2014 earnings report on January 28th, revealing high revenue from advertising but rising costs due to long term investments. Facebook’s executive team highlighted these investments in its third quarter earnings report, noting that long term investments in Atlas, LiveRail, ad tech, and Audience Network are strategic and integral to Facebook’s growth, though the payoffs will take time.
Facebook has been rated 22 times by top performing analysts over the past 3 months, with 21 bullish ratings and 1 neutral rating, making the top analysts’ consensus for the stock a Strong Buy.
Facebook was recently rated on January 29 by 5-Star analyst Youssef Squali of Cantor Fitzgerald who maintained a Buy rating on the stock and raised his price target from $80 to $90.
Squali reasoned that Facebook remains a “top pick” due to “1) its growing position as the largest/most-engaged Internet platform, offering personalized marketing at scale, 2) the ongoing shift of ad dollars to mobile/social, and 3) untapped monetization potential for Instagram, Messenger and WhatsApp (at 300M, 500M and 700M MAUs, respectively and growing), all at a compelling valuation.”
Facebook is currently valued at $213.37 billion.
Gilead Sciences, Inc. (NASDAQ: GILD)
Gilead Sciences had a huge breakthrough in January 2014 when Sovaldi, its treatment for people with hepatitis C, became available on the market. Additionally, in October 2014 the FDA approved Gilead’s Harvoni, an improved treatment for hepatitis C that has been proven to completely cure the disease in 8 weeks.
Gilead made a deal with CVS Pharmacies in the beginning of this past January in which CVS will exclusively offer Gilead’s hepatitis C drugs. Harvoni will be on CVS’s preferred drug list and accessible by customers using the Affordable Care Act, Medicaid, and parts of Medicare.
Gilead has been rated 14 times over the past 3 months with all bullish ratings, making the top analysts’; consensus for the stock a Strong Buy.
5-Star analyst Alan Carr of Needham recently reiterated a Buy rating on Gilead Sciences on January 28, ahead of the company’s fourth quarter 2014 earnings scheduled for Tuesday, February 3.
He reasoned his Buy rating on increased sales expectations of Sovaldi and Harvoni, noting “Given superior profile relative to other agents… we expect the drug to hold a dominant share of the market. We expect real-world efficacy and safety data to be generally supportive of Harvoni.”
Gilead Sciences is currently valued at $151.1 billion.
Alibaba Group Holding Ltd (NYSE: BABA)
E-commerce giant Alibaba broke records having the biggest IPO in history on August of 2014. Since then, the company’s stock has increased about 32 percent. Alibaba has been at the forefront of the rapidly growing Chinese e-commerce market despite facing accusations of not taking action against the sale of fake goods, bribery and other illegal activities on its website.
In its most recent earnings report, Alibaba saw an increase of 49 percent in gross merchandise volume (GMV) reaching $127 billion; 42 percent of which constituted mobile devices. The company also saw a rise in mobile monthly active users, almost doubling to 265 million.
Alibaba has been rated 16 times by top performing analysts over the past 3 months with 15 bullish ratings and 1 neutral rating, making the top analyst consensus for the e-commerce company a Strong Buy.
5-Star analyst Gil Luria recently reiterated an Outperform rating on Alibaba with a $115 price target on January 29, noting that the stock offers a “compelling combination of size, growth and profitability, on a global basis.”
Alibaba is currently valued at $216.65 billion.
Biogen Idec Inc (NASDAQ: BIIB)
Biogen Idec specializes in developing therapies for the treatment of neurodegenerative, hematologic and autoimmune diseases.
In the beginning of December, Biogen announced positive interim results from an early-stage study of their Alzheimer’s disease treatment called BIIB037, that attacks amyloid plaques in the brain. The company is now planning to move “aggressively” into Phase III, the most advanced stage of studies. This is generally the last step before seeking regulatory approval.
In addition, Biogen’s fourth-quarter 2014 profit nearly doubled, as its portfolio of multiple sclerosis treatments raked in a 34 percent growth in revenue. Its pipeline for 2015 includes therapies for multiple sclerosis, spinal muscular atrophy and Alzheimer’s disease.
Biogen has been rated by 9 top performing analysts over the past 3 months, with 8 bullish ratings and 1 neutral rating, making the company’s top analyst consensus a Strong Buy.
5-Star analyst Michael Yee of RBC Capital recently reiterated a Buy rating on Biogen on January 30, noting “We believe [BIIB037] will look like the most promising drug in Alzheimer’s to date, and [it] has a reasonable chance with significant upside ($520-plus/share or at least 37%-plus upside if works) vs. downside.”
He added, “[Biogen] is our favorite large-cap to own, as we believe it has the most ‘innovative’ pipeline of transformative but well-understood, higher-risk medicines, which is why upside potential is so large vs. downside.”
Biogen Idec is currently valued at $91.99 billion.
Campbell Soup Company (NYSE: CPB)
Campbell’s Soup Company is best known for producing canned soups and related products. The company’s soup sales have struggled in 2014 as its faced increasing competition.
As a result, the company lowered its full-year sales and earnings guidance for fiscal 2015, based on its expectation that results for the second quarter and the remainder of the year will be weaker than anticipated.
In an effort to organization structure and key growth strategies, Campbell’s Soup plans to rearrange its reporting segments to be structured on the basis of product categories instead of geographies or brand groups. The segments will now be called Americas Simple Meals and Beverages, Global Biscuits and Snacks and Packaged Fresh.
Campbell’s Soup has been rated by 3 top performing analysts over the past 3 months, with 2 bearish ratings and 1 neutral rating, making the company’s top analyst consensus a Strong Sell.
Campbell Soup was recently rated a Sell by 4-Star analyst David Driscoll of Citigroup, reasoning that he has grown cautious of the food industry and does not expect sales volumes to improve any time soon.
Campbell’s Soup is currently valued at $14.95 billion.
CBOE Holdings, Inc (NASDAQ: CBOE)
CBOE Holdings is the holding company for Chicago Board Options Exchange (CBOE), CBOE Futures Exchange (CFE) and other subsidiaries. CBOE Holding actually just reported decent fourth quarter earnings results on February 6 but were just shy of analysts’ estimates.
However, many believe the company’s 2015 guidance will be hard to reach due to a drawn-out low unpredictable market, with little traction in VIX futures, and more significant competition.
CBOE Holdings has been rated by 4 top performing analysts over the last 3 months with 2 bearish ratings and 2 neutral ratings, making the company’s top analyst consensus a Moderate Sell.
CBOE Holdings was recently rated a Sell on January 13th by 4-Star analyst Andrew Blostein of Goldman Sachs who reasoned: “Our analysis suggests CBOE’s key growth products are becoming more cyclical/VIX-level dependent, which should lead to a slower volume growth as the VIX typically remains muted during economic expansion.”
CBOE Holdings is currently valued at $5.23 billion.
Exxon Mobil Corporation (NYSE: XOM)
Exxon Mobil is a multinational oil and gas corporation. The company took a hit when the crude oil plunge significantly dropped oil prices towards the end of 2014 due to weak demand and the strengthening dollar.
Even though oil prices are beginning to recover, oil stocks are still lacking in sales growth making Exxon unattractive to investors.
5 top-performing analysts have rated Exxon over the past 3 months with 3 bearish ratings and 2 neutral ratings, making the company’s top analysts’ consensus a Moderate Sell.
Exxon was recently rated on January 23 by 4-Star analyst Edward Westlake of Credit Suisse, who downgraded his rating to Sell.
He noted, “targeted to grow its volumes modestly from 4mbd to 4.3mbd by 2017, as upstream margins expanded, with some investments still to pay off in the downstream, and with asset sales,” however, “XOM’s cash neutral ‘oil price’ was set to fall.”
Exxon Mobil is currently valued at $388.05 billion.
Verisign, Inc. (NASDAQ: VRSN)
Verisign is a company known for operating a diverse array of network infrastructures. The company recently reported its fourth quarter earnings, revealing a big profit drop largely due to tax charges. Overall, VeriSign reported a profit of $65.5 million, down from $292.1 million, a year earlier.
The profit decrease is due to domain renewal rates dropped from 72.7 percent a year earlier to 72 percent and new registered domains missing the company’s projection of 700,000, reaching only 590,000 for the quarter.
In the last 3 months, 1 top ranked analyst rated Verisign a bearish rating, making the company’s top analyst consensus a Strong Sell.
Verisign was recently rated a Sell on January 26 by 4-Star analyst Phillip Winslow of Credit Suisse, noting “We believe the risk/reward from VeriSign’s current share price, which equates to a NTM EV/UFCF multiple of 13.1 (versus our forecasted 5-year CAGRs for operating profit and EPS of 5.0 percent and 8.9 percent, respectively), is biased to the downside given (1) near-term risk to domain name growth and (2) our expectation for slowing operating profit and EPS growth relative to valuation.”
Verisign is currently valued at $7.31 billion.
Latest Ratings for FB
|Oct 2016||Credit Suisse||Maintains||Outperform|
|Sep 2016||JP Morgan||Maintains||Overweight|
|Sep 2016||Loop Capital||Initiates Coverage on||Buy|
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.