In a financial environment riddled with unprecedented levels of uncertainty, investors are at wits’ end. When it comes to finding an investment strategy that will yield returns, traditional methods might not be as dependable. So, how should investors get out of the rut?
In times like these, a more comprehensive stock analysis can steer investors in the direction of returns. Rather than looking solely at more conventional factors like fundamental or technical analyses, other metrics can play a key role in determining whether or not a particular stock is on a clear path forward.
Investing.com offers a tool that does exactly that. Its Investing Insights measures six key metrics including analyst ratings, blogger opinions and news sentiment as well as hedge fund, corporate insider and investor activity. After analyzing each metric, a single numerical score is generated, with 10 being the best possible result.
With this in mind, we poured through the database, filtering the results to show only the names that have earned a “Perfect 10” Smart Score, and boast a double-digit upside potential. Here are three for your consideration.
CommScope Holding (COMM)
We’ll start with CommScope Holding (NASDAQ:COMM). This company has a clear path into 5G – its main products are hardware for network infrastructure. CommScope produces antennas used in tower and building installations, base stations for network transmitters, and outdoor wireless power supplies. These products are produced and marketed by subsidiaries; CommScope is the holding company connecting them together.
The connection to 5G is obvious; the new networks will require a tremendous array of new hardware in the buildout, a buildout that is already underway and gaining strength – and CommScope is already positioned to take a part in it. The company is already producing and marketing an array of products for 5G enabled hardware.
Earlier this month, CommScope released its second-quarter earnings report. The report showed a modest 4% yoy growth in revenues, to $2.19 billion. The net loss per share, at 82 cents, was much improved from the $1.71 EPS loss reported in the year-ago quarter.
However, supply chain headwinds are leading the company to be cautious about 2H EBITDA and FCF outlook relative to 2H20. These headwinds spooked investors and are likely to blame for the major sell-off that followed the earnings announcement.
Credit Suisse analyst Sami Badri, however, remains unfazed by cries of supply-chain constraints. Badri rates COMM an Outperform (i.e. Buy), and his $23 price target suggests room for ~55% upside this year.
“…the company remains positioned well for 5G deployment densification efforts by telcos, network extensions with cable companies, data center build outs with clouds/multi-tenant data centers, and RDOF… Given COMM’s product indexation to strong end market trends, including 5G, RDOF, digital infrastructure growth, and cable network densification, we continue to identify COMM as a key thematic beneficiary to these themes and at an attractive valuation,” Badri opined.
Overall, this is a stock with a Strong Buy consensus rating, based on 6 reviews that include 5 to Buy and 1 to Hold. CommScope has an average price target of $24.40, implying ~65% share growth in the next 12 months. (See COMM stock analysis)
Dish Network (DISH)
This Colorado-based tech firm is a leader in direct TV, offering its customers television service via satellite broadcast. In addition, Dish Network (NASDAQ:DISH) has also moved into the prepaid wireless mobile niche, and to that end acquired Boost Mobile last year, integrating the wireless company’s 8.89 million customers.
Dish has a strong presence in wireless connectivity, on top of its satellite TV service, it acquired Boost as part of a 2019 agreement with Sprint, which saw Dish gain Sprint’s prepaid wireless service. The company is also a mobile virtual network operator with AT&T. Dish is working to build out its own 5G network, as part of its Dish Wireless services. Dish currently has 8.9 million wireless subscribers.
In its recent financial report, Dish reported first half results for 2021. The company saw $8.98 billion in revenue for the first six months of the year, a substantial increase from the $6.4 billion reported in the first half of 2020. Total net income was $1.3 billion, which compared favorably to the $525 million in the same period of 2020. Dish’s six-month EPS was $2.05, more than double the 90 cents per share reported one year earlier.
Deutsche Bank analyst Brian Kraft covers Dish, and he sees the company’s move into 5G service as a net plus. Kraft writes, “DISH’s 5G network capex is starting to ramp up, reaching $200M this quarter, and the company noted that its wireless network investment is set to ‘increase substantially throughout the remainder of 2021,’ and adds also that the agreement with AT&T “[enables] DISH over the medium to long term to direct its network investment dollars towards the highest return opportunities, including dense urban markets and the 5G enterprise opportunity, while relying on its MVNO partner for coverage in smaller and rural markets…”
Kraft rates DISH as a Buy, with a $77 price target that implies an upside of 80% for the year ahead.
All in all, DISH holds a Moderate Buy rating from the analyst consensus, based on 6 Buys, 4 Holds, and 1 Sell set in recent weeks. The stock is selling for $42.70, and the $52.55 average price target suggests it has room for 23% growth in the next 12 months. (See DISH stock analysis)
ConnectOne Bancorp (CNOB)
Let’s turn to the financial sector, specifically, to ConnectOne Bancorp (NASDAQ:CNOB), a bank holding company with operations in New York State and New Jersey. The company’s banking subsidiary, ConnectOne Bank, has 26 locations serving individual and commercial customers with a full range of banking services.
The company’s total assets were reported for Q2 as $7.7 billion, up $162.7 million (or 2%) from the end of 2020. Loans receivable make up $6.4 billion of that total. EPS for Q2 came in at 81 cents, down a penny from the 82 cents reported in Q1, while top line revenue gained 3% sequentially and came in at $77.5 million. The company declared a dividend, of 11 cents per common share, payable on September 1. At $0.44 annualized, it gives a yield of 1.5%.
The stock is up 94% over the past year, but would you believe it could go up another 35%? Raymond James’ William Wallace does. The analyst rates CNOB a Strong Buy along with a $40 price target.
“We are optimistic that above-peer loan growth likely continues for what we believe is one of the more dynamic banks in the market. Furthermore, fee income (while still only ~6% of total revenue) continues to demonstrate relative strength… with shares trading at a steep discount to peers on a P/E basis, we continue to believe the risk/reward dynamic skews very favorably given the company’s strong growth and profitability profiles relative to the industry,” Wallace noted.
While ConnectOne has only received 3 recent stock reviews, they are in agreement with Wallace – making the Strong Buy consensus rating on the stock unanimous. The shares are priced at $29.46 and the $35.67 average price target indicates a 21% upside from that level over the coming months. (See CNOB stock analysis)
To find more ideas for stocks trading at attractive valuations, visit Investing Insights.