These 3 “Strong Buy” Stocks Are Top Picks for 2021, Say Analysts
Some traditions are too old-fashioned to elude, and Wall Street's annual top picks are one. Typically published at the end or beginning of a year, Street analysts post reviews of the stocks they think will perform best in the months ahead - their top picks.
The analysts carefully analyzed each stock, examining its past and current performance, its trends over different time frames, and management's plans - they take it all into account. Your recommendations provide valuable pointers for building a stable portfolio in the new year.
With that in mind, we used TipRanks' database to identify three stocks that analysts have identified as their “top picks” for 2021.
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Talos Energy (TALO)
The Gulf of Mexico has long been known as one of the largest hydrocarbon producing regions in the world, and Talos Energy, which produces around 48,000 barrels of oil equivalent daily from offshore operations in the Gulf, is a major player in the region.
Talos ended the third quarter of 2020 with a net loss, but revenue increased 53% sequentially to $ 135 million. The company reported over $ 353 million in available cash at the end of the quarter, including $ 32 million in cash and $ 321 million in available credit.
In December of last year and into this January, Talos strengthened its liquidity situation by issuing senior secured bonds. The December issue of $ 500 million at 12% will primarily be used to repay an earlier bond due next year. The January issue, another $ 100 million, will be used to cover the outstanding debt of the reserve-based credit facility. Both sheet music editions are due in 2026.
Subash Chandra, an analyst at Northland, singled out TALO as his best E&P pick for 2021, writing: "We believe TALO is one of the few companies we know to be trading in lagging PDPs for no good reason The company has addressed the maturity wall, emphasizing credit facility with a stock offering and refi in December. They are entering 2021 with respite to cross the finish line with Zama and look for opportunities to scale in GoM. "
To do this, Chandra rates TALO as outperforming (i.e., buying) and setting a price target of $ 19, indicating 91% growth potential in the months ahead. (To see Chandra's track record, click here.)
In total, Talos received a strong buy rating from the analyst consensus with five analyst ratings, including 4 purchases and a single hold. The stock is priced at $ 9.96, and their average target of $ 14.33 gives an uptrend of ~ 44% over the one-year horizon. (See TALO stock analysis on TipRanks)
Next up is Twilio, a cloud communications company based in Silicon Valley. With Twilio's software services, customers can run their telecommunications service through their office computer servers and provide not only phone calls, but also chats, texts and video conversations. The service includes security features such as user verification.
The COVID pandemic and the shift to remote working that has been imposed on the economy has been a boon to Twilio. The relocation brought a premium to stable and reliable long-distance connectivity and teleworking, and the company's revenue, which was already strong and growing sequentially each quarter, rose 20 to $ 447 million in the third quarter. As a result, Twilio's shares have risen 225% over the past 52 weeks.
The Oppenheim-based analyst Ittai Kiddron sees the company on a solid basis for further growth and writes: “While there were some puts and takes in the first quarter of 21, the long-term opportunities of Twilio are still underestimated by investors. We believe that the company's differentiated product portfolio (communication / data) and the evolving GTM approach (hiring / GSI) can drive the introduction / expansion of G2K / Int'l and enable a speed of> 30%. Large-scale growth (> $ 4 billion / $ 6 billion) through FY 23/24. "
The 5-star analyst chooses TWLO as the “top choice” based on its optimistic analysis of Twilio. This comes with an Outperform (i.e. Buy) rating and a target price of $ 550, which translates into year-on-year growth of 41%. (To see Kiddron's track record, click here.)
How does Kiddron's bullish bet affect the road? Overall, Wall Street likes Twilio, a fact revealed by its 21 registered analyst ratings. No less than 18 of these are purchases against just 3 holds. However, due to the stock's recent gains, the price rose to $ 388.65, gaining just 2% before hitting the average price target of $ 396.88. (See TWLO stock analysis on TipRanks)
Medical technology is a field of almost endless possibilities, and SI-Bone has found a niche. The company specializes in sand diagnosis of pain and dysfunction in the sacroiliac joint between the back and pelvis. The company's revenues declined between the 19th and 2nd quarters of 20 as the corona crisis dampened elective medical procedures. That turned in the third quarter when the economy began to open up. There has been a surge in pent-up demand in many industries, including the medical sector, that has not yet resolved.
In raw numbers, SIBN reported sequential revenue growth of 42% for the third quarter, with revenue of $ 20.3 million. Sales increased by 26% compared to the previous year. During the quarter, the company passed 50,000 iFuse procedures performed by 2,200 surgeons around the world. The company had cash of $ 132 million at the end of the quarter against long-term debt of $ 39.4 million. Looking ahead, the company expects full year revenue to increase 8% to 10% year over year in 2020 with revenue of $ 73 to $ 74 million.
Analyst David Saxon, who covers the stock for Needham, says, “SIBN has proven its resilience during the pandemic and we believe its growth drivers can allow it to outperform consensus earnings over the course of 2021. Additionally, we expect SIBN's sales force to expand and gain momentum in 2021 with surgeon training, upcoming product launch and direct marketing to patients will all add to strong sales over the next several years. "
Saxon uses these points to support its status as a "Top Pick" for SIBN. His average price target is $ 35, which suggests an upward move of 23% and fits well with his buy recommendation. (To view Saxon's track record, click here)
All in all, SI-Bone is getting a strong buy from Wall Street and agrees - based on 5 positive reviews. The shares are selling for $ 28.48, and their average target of $ 33.80 implies room for ~ 19% growth over the course of 2021. (See SIBN stock analysis on TipRanks)
To find great ideas for trading stocks at attractive valuations, visit TipRanks 'Best Stocks to Buy, a newly launched tool that brings together all of TipRanks' stock insights.
Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.
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