Market volatility is creating opportunities; There are 2 ‘Strong Buy’ stocks here

As the world is gripped by an increasingly long list of negative macro trends, the market has shown a markedly bearish slant in 2022. Investors are trying to understand the chaos. It has been observed from time to time that no stock can tolerate malicious macro development.

However, such market behavior creates opportunities for investors who are willing to take some risks. Lots of sound stocks lose share value because they are carried by common currents. Finding them, and keeping them out of the Undertaker, is the mark of a wise investor.

We started the search process using the TipRanks database to see details of two stocks that have a ‘Strong Buy’ rating from the analyst community and are proud of the many ups and downs for the coming year. Let’s dive in for a closer look.

Sunova Energy International (Nova)

We will start in the renewable energy sector. Sunnova provides energy and energy savings to the residential solar market. The company’s products include every step of the solar installation process, from roof panels to storage batteries to roof replacement if necessary, as well as insurance on installation and maintenance planning and financing for purchases. As of the end of 1Q22, the company has boasted more than 915 dealers and sub-dealers across 37 states and territories, serving more than 207,000 customers.

The company’s highest-earning quarter is usually Q3 in the late summer months – which makes sense for a solar power company. At 1Q22, though, Sunnova saw a 59% increase in revenue from the previous quarter. The top line in Q1 came in at 65.7 million, and the company added 15,300 customers during this period. Although Sunnova typically runs a net loss every quarter, that loss was reduced last time. Losses fell to 20 20.6 million from .1 24.1 million a year earlier. Despite the net loss, Sannova ended the quarter with solid cash assets, limited and unregulated, totaling $ 325 million.

All this adds up to a company that Northland analyst Abhishek Sinha thinks is ready for further profits. Sinha writes, “We believe Nova Residential offers an attractive entry point for investors looking for exposure to the solar market. In our view, NOVA is a high-quality business with extremely strong and reliable cash flow. The company has a well-oiled dealership-based business model that is poised to grow with increasing solar demand. “

“Currently, all solar stocks have been hit hard by a combination of events, including rising rates, rising equity markets and uncertainty over government policies. However, when the dust settles, we believe NOVA should return, due to strong housing demand,” Sinha added. Has done.

Consistent with these bullish comments, Sinha has started coverage of NOVA stocks with an outperform (i.e. buy) rating with a target price of $ 30, signaling a ~ 73% growth this year. (See Sinha’s track record, Click here.)

Sinha’s outlook is hardly the only positive here – the stock has 11 recent analyst reviews and is all bullish for a unanimous strong by consensus rating. The stock is selling at .2 17.29 and their ড় 36.64 average price target indicates a strong 112% one-year uptrend. (See Nova Stock Forecast in Tipperary)

US Food Holdings (USFD)

For the second stock, we will move into the food service industry. US Foods is a holding company that distributes fresh, frozen and dried food products to food service customers through its affiliates. The company boasts a customer base of more than 300,000 clients, consisting of healthcare facilities, hotels, restaurants, schools and government offices.

The size of the business can be seen by looking at the annual revenue figures. Even in the year of the 2020 epidemic crisis, when most of the economy was in lockdown, US Foods brought in a total of $ 22.89 billion. This figure will increase by 28% to $ 29.48 billion as economic conditions improve in 2021.

Profits seem to have continued this year. 1Q22 revenue came in at 7.8 billion, up 23% y / y. The company’s quarterly gross profit increased $ 1.2 billion, 19% y / y. It translated into a consistent EPS for the quarter, at 36 cents, which was three times the price a year earlier, and lost the 22-cents forecast by a wide margin.

US Foods is not stable. The company is working to expand its footprint, and opened a new chef’s store in South Carolina this month. This 33,000-square-foot warehouse store joins three existing locations in that state. In addition, US Foods has entered into a partnership with Calera, a leader in hydroponic indoor vertical farming, to expand its product line by providing fresh vegetables year-round.

Alok Patel, an analyst at Bernberg Bank, sees US Foods in an enviable position to expand its market share, writing: After a difficult year of declining sales due to the COVID-19 epidemic, US Foods has regained its top line and is ready to return to profitable growth in our view. “

“We believe that meaningful margin improvements should be realized by: 1) adding new customers (especially independent restaurants); 2) increasing wallet shares with existing customers; 3) adding additional cash-and-carry units to unused areas To further differentiate; and 4) to coordinate through opportunistic M&A. We believe that the risk / reward profile of US Foods offers asymmetrical reverse possibilities, “Patel added.

These comments support Patel’s buy rating for USFD shares, while setting its price target at $ 53, the stock has a one-year uptrend of 73%. (To view Patel’s track record, Click here)

Overall, the record for this stock contains 9 analyst reviews, and includes 7 buys as opposed to just 2 hold for a strong buy consensus outlook. The USFD’s average price target is $ 45.13, which gives it a 47% upside from the current trading price of $ 30.63. (See USFD Stock Forecast at TipRanks)

To get a better idea of ​​stock trading at attractive valuations, visit the best stocks to buy at TipRanks, a newly launched tool that integrates all the equity insights of TipRanks.

Disclaimer: The views expressed in this article are those of the featured analysts only. Content is intended for informational purposes only. It is very important to do your own analysis before making any investment.

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