The last two weeks have seen the markets go on a roller coaster ride, that’s for sure. The sudden insolvency and bankruptcy of Silicon Valley Bank, as well as the federal shutdowns of Signature and Silvergate banks, have raised concerns of a run on old-fashioned banks. The announcement by Credit Suisse of its difficulties in accessing capital has fueled fears that even the big names in banking are not immune to contagion.
President Biden and Treasury Secretary Yellen have made it clear that SVB and Signature account holders “will be compensated,” but uncertainty remains around other regional banks. And no one knows exactly how the Federal Reserve will react, via interest rate policy, at next week’s FOMC meeting.
It’s a confusing situation, tailor-made for an intuitive data analysis tool. TipRanks Smart Score is just that – an AI-powered data collection and collation tool that gathers and sorts the flood of statistical information generated by over 8,500 publicly traded stocks. The tool then presents this data on an easy-to-use scale of 1 to 10, giving each stock a single-digit score based on a distillation of 8 separate factors each of which has been shown to correspond to the stock’s outperformance. A high Smart Score can’t guarantee a stock will beat stock indices, but it does give investors a strong hint of a positive performance, and “Perfect 10” stocks are always worth a closer look.
So let’s get this ball rolling. Using the Smart Score platform, we identified two stocks that achieved the enviable Smart Score “Perfect 10”. Each also has a strong analyst consensus buy rating and double-digit upside potential for the year ahead. It’s not just a perfect score, it’s a perfect combination of bullish indicators.
Network technologies (ARRY)
We will start in the solar energy industry, with Array Technologies. This company specializes in solar tracking technology, the combinations of hardware and software needed to keep utility-grade photovoltaic array arrays properly aligned with the sun, for maximum efficiency. Array’s flagship product, the DuraTrack system, is used in large-scale solar power projects, utility-connected types of power generation, and is considered a leading system in the field of solar tracker.
Leading businesses in rapidly expanding fields will frequently suffer net losses – and as recently as 2H21, Array was not a net profitable business. Starting in 3Q22, however, the company turned a corner and achieved both record revenue and profitability. In the third quarter, Array posted record revenue of $515 million, compared to $188.7 million a year earlier, and net income to common shareholders of $28.6 million, compared to a loss of $33 in 3Q21. The company’s EPS of 19 cents per diluted share beat guidance by 11 cents by a margin of 72% and represented a dramatic turnaround from the 7 cent EPS loss a year earlier.
Array will report its fourth quarter and full year 2022 results on March 21. In the meantime, the company has released preliminary financial results and forecasts. Arrays is heading for $1.62 billion to $1.64 billion in total revenue for 2022; Achieving this would represent a 73% increase in revenue year-over-year from the $941 million reported in 2021. The company had $1.9 billion in its backlog as of December 31, 2022.
Looking ahead, Array forecasts total 2023 revenue of between $1.8 billion and $1.95 billion, with full-year adjusted EPS of 75 cents to 85 cents.
Scotiabank analyst Tristan Richardson covers this stock and, reviewing the company’s recent trends, he takes an unequivocal bullish stance.
“Array plays directly on the global trends of secular growth in utility-scale solar capacity, with its ground-tracking product. Although short-term uncertainties remain on the project schedule, related to the availability of modules for developers, in the long term we are looking for solar capacity growth of 15% to 20%, which offers Array a solid secular background as well as potential for increased market adoption. tracking solutions in general,” Richardson said.
To that end, Richardson notes that ARRY shares are outperforming (i.e. bought), and his price target of $26 indicates 52% upside potential in the months ahead. (To see Richardson’s track record, click here)
Bulls are definitely on the run for ARRY as the stock recently saw 12 analyst reviews with a 10 to 2 split favoring buys over holds – for a consensus strong buy rating. The shares are priced at $17.07 and the average price target, $26.73, implies an upside of around 57% by the end of this year. (See ARRY stock analysis on TipRanks)
Argenx SE (ARGX)
The second “perfect 10” stock we’ll be looking at is Argenx, a biopharmaceutical company in the immunology niche, which is working on new treatments for rare diseases. The company has an extensive pipeline, with nearly 20 distinct lines of research investigating the uses and efficacy of 3 different drug candidates.
The lead candidate, efgartigimod, has received approval in the United States, Europe and Japan for the treatment of the rare gMG neuromuscular disease, and the company has focused in 2022 on drug launch activities, under the Vyvgart brand.
In its 2022 annual report, Argenx provided updated information on the launch of Vyvgart. Worldwide, the company notes that there are approximately 3,000 patients with gMG on Vyvgart and the drug generated net revenue of $400.7 million for the full year. Additionally, the company is following regulatory processes in several countries, including China, the UK, Canada and Italy, in preparation for additional approvals and commercial launches.
Argenx is also submitting efgartigimod to additional clinical trials for label expansion purposes. These trials are in various stages, with the ADAPT-SC trials being the most advanced. This completed trial was for a neurological, gMG in adult patients, application of the drug, and the company, based on positive data, received FDA acceptance of the Biologics License Application with a PDUFA date of 20 June 2023.
The company’s ADHERE trial, a registrational clinical trial in the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP) is on track to release first data in 2Q23, and registrational Phase 2 trial/ 3 ALKIVIA, studying efgartigimod in the treatment of three subtypes of idiopathic polyneuropathies and inflammatory myopathies, is in progress. Argenx has even planned a registrational clinical trial for the treatment of thyroid eye disease (TED) scheduled to launch in 4Q23.
Although we’ve only described the tip of the iceberg of Argenx’s extensive pipeline, these programs are at the heart of Baird analyst Joel Beatty’s assessment of the stock. Beatty writes: “We now see this as a good entry point into the title, ahead of what we expect to be successful registration test results for CIDP in 2Q23 (which could reintroduce a strong acquisition premium in the title). Additionally, we expect sales of efgartigimod for gMG to continue to grow at a good pace, supported by the approval of the SQ formulation in June.
In his view, ARGX stock deserves an outperform (i.e. buy) rating, and his price target of $460 suggests the stock has room for a 28% upside price. of the coming year. (To see Beatty’s track record, click here)
The strong buy consensus rating here shows that the bull is in effect, as evidenced by the 15-to-1 split of the recent 16 stock reviews, favoring buying over booking. (See ARGX stock analysis on TipRanks)
To find great stock ideas trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that brings together all of TipRanks’ stock information.
Disclaimer: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.