Smart inventory investing shouldn’t be emotional, however traders are solely human, in any case, making it tough to comply with a rational buying and selling technique.
Investors ought to bear in mind the recommendation of Warren Buffett: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” What Buffett is advocating is the oldest of market recommendation: purchase low and promote excessive.
Taking this into consideration, we set out on our personal seek for compelling funding alternatives buying and selling at a reduction. Using TipRanks database, we have been capable of finding 3 shares which are down from their current peaks, whereas some Wall Street analysts are recommending to ‘buy the dip.’ Let’s take a better look.
Teladoc Health (TDOC)
We’ll begin with Teladoc, a distant medical care service, which makes use of on-line networking to attach sufferers with docs for non-emergency issues, together with ear-nose-throat points, lab referrals, fundamental medical recommendation and diagnoses, and prescription refills for non-addictive drugs. In the firm’s phrases, it’s “remote house calls by primary care doctors,” utilizing digital know-how to supply an old style service.
Teladoc’s service is in excessive demand, and the corona 12 months noticed the firm thrive – its enterprise mannequin was an ideal match for COVID-19 pandemic circumstances. Full-year revenues in 2020 grew 98% year-over-year, to 1.09 billion, and complete affected person visits elevated by 156%, to 10.6 million. In addition, the firm in October accomplished its merger with competitor Livongo, in a deal price $18.5 billion. Teladoc shareholders now management 58% of the mixed firm.
While the transfer provides to Teladoc’s capabilities and potential affected person base, it additionally meant the firm incurred giant prices throughout This fall. Teladoc needed to pay up in money for the merger, and because of this, the This fall earnings outcomes confirmed a heavy EPS lack of $3.07 per share.
In addition to the This fall web loss, traders are additionally apprehensive by the 2021 membership steerage. Specifically, the determine is more likely to be between 52 million and 54 million, which means progress of +3.4-7.4% year-over-year. This is method down from +40% in 2020 and +61% in 2019.
The inventory has slipped 37% since its current peak in mid-February, however Canaccord’s 5-star analyst Richard Close says to ‘purchase this dip.’
“Bright spots such as multi-product sales, increasing utilization, new registration strength, and visit growth in noninfectious areas trump the membership metric when all is said and done. Opportunities have presented themselves in the past to jump into (or accumulate shares of) Teladoc — we believe this is one of the opportunities,” Close confidently famous.
Close backs these feedback with a Buy ranking and $330 worth goal that means an upside of 78% in the coming 12 months. (To watch Close’s monitor document, click here)
Overall, Teladoc has engendered loads of Wall Street curiosity. There are 21 opinions on the inventory, of which 13 are to Buy and eight are to Hold, giving TDOC a Moderate Buy consensus ranking. The inventory is promoting for $185.43, whereas its $255.05 common worth goal suggests a one-year upside of ~38%. (See TDOC stock analysis on TipRanks)
Agnico Eagle Mines (AEM)
From medical care we’ll transfer on to the mining business, as a result of generally proudly owning a gold mine is the subsequent smartest thing to proudly owning the gold. Agnico Eagle is a Canadian gold miner in the enterprise for over 60 years. The firm has lively mining operations in Canada, Mexico, and Finland, and confirmed robust manufacturing in 2020. The firm’s This fall report detailed over 501,000 ounces of gold produced, at a manufacturing price of $771 per ounce – in opposition to an ‘all-in sustaining cost’ of $985 per ounce.
That quarterly efficiency was duplicated for the full 12 months 2020. Total gold manufacturing got here in at greater than 1.73 million ounces, the high finish of the beforehand revealed yearly steerage, and the manufacturing price per ounce, $838, was properly under the 12 months’s all-in sustaining price of $1,051 per ounce.
High manufacturing – the fourth quarter quantity was an organization document – led to excessive revenue. Agnico reported This fall web revenue of $205.2 million, which got here out to 85 cents per share. For the full 12 months, revenue got here in at $511.6 million, or $2.12 per share. This determine included the 9-cent per share loss in Q1, and was nonetheless 6% increased than the 2019 determine.
Despite the robust 2020 full-year figures, AEM shares have slipped since the earnings launch, falling some 21% of their worth. While the firm is worthwhile, and manufacturing is assembly expectations, earnings in This fall have been down 7.6% sequentially and 38% year-over-year.
Covering this inventory for CIBC, analyst Anita Soni writes, “In our view, the market reaction on the back of quarterly earnings was overdone and we would recommend investors add to positions on the dip… We continue to favor Agnico for its track record of prudent capital allocation, largely organic growth strategy, exploration expertise (evident in the strong reserve replenishment and resource additions in a COVID impacted year), project pipeline, and strong management.”
In mild of those feedback, Soni set a worth goal of $104 to associate with an Outperform (i.e. Buy) ranking. Her goal implies a one-year upside potential of 73% from present ranges. (To watch Soni’s monitor document, click here)
Overall, Agnico Eagle will get a Strong Buy analyst consensus ranking, primarily based on 12 current opinions that embrace 9 Buys in opposition to 3 Holds. The shares are priced at $60.12 and their $85.62 common worth goal implies a 42% upside potential for the coming 12 months. (See AEM stock analysis on TipRanks)
Last however not least is Redfin, a Seattle-based, on-line actual property dealer, with a enterprise mannequin primarily based on modest charges (in the 1% to 3%) for sellers to record their houses and for closing the sale. The firm goals to make the residence tour, itemizing debut and escrow processes quicker and simpler.
Redfin reported a 4.7% year-over-year income achieve in This fall, with the high line reaching $244 million. EPS, at 11 cents, was far above the 8-cent web loss recorded in the year-ago quarter. Both numbers beat the Wall Street estimates by substantial margins. For the full 12 months 2020, the web loss got here in at $18.5 million, or lower than one-fourth of the 2019 determine.
Since the earnings have been launched, RDFN shares are down 25%. Investors are considerably spooked by the firm’s Q1 steerage, for a quarterly loss in the $36 million to $39 million vary. This is increased than 2020’s complete loss, and there may be some fear that Redfin is slipping away from profitability. The firm is dealing with progress headwinds from two elements, a scarcity of brokers and a scarcity of properties to record. The first issue will be met by a hiring drive, however the second is out of the firm’s management – and solely partly compensated for by increased property values.
Ygal Arounian, 5-star analyst with Wedbush, wrote a notice on Redfin titled, ‘Buy the Dip, There’s a Lot to Like Here.’
“The strength in the housing market is continuing to drive material benefits to Redfin, where it is having trouble keeping up with demand. Customers seeking service from agents was +54 y/y, even after Redfin made changes to its site that discouraged customers from requesting tours when an agent was unlikely to be available,” Arounian wrote.
The analyst added, “Redfin still doesn’t have nearly the amount of agents it needs for the level of demand it is seeing and is hiring aggressively to get there. Agent recruiting increased by ~80% for lead agents in Dec/ Jan vs. Sep/Oct. Redfin is also seeing increasing repeat rates and referrals, which can support growth for longer.”
To this finish, Arounian put a $109 worth goal on the inventory, indicating his confidence in a 57% one-year upside, and backing his Outperform (i.e. Buy) ranking. (To watch Arounian’s monitor document, click here)
Redfin’s shares have 10 current opinions on file, with a break down of 4 Buys and 6 Holds, for an analyst consensus ranking of Moderate Buy. The common worth goal is $87.71, implying a 27% upside from the $69.22 buying and selling worth. (See RDFN stock analysis on TipRanks)
To discover good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Best Stocks to Buy, a newly launched software that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed in this text are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is essential to do your individual evaluation earlier than making any funding.