1 week Ago
Despite the extreme volatility (a sharp sell-off at the beginning of the month with an equally sharp rebound), the S&P ended August about where it started. Has this volatility created any buying opportunities? Below is a list of August Buy recommendations made by analysts who had no other bullish recommendations over the past 3 months. For your directory assistance, we've classified the opportunities by sector.
Healthcare Aldeyra Therapeutics ( ALDX ) - Longtime analyst Wall Street Titan says its eye drop for Dry Eye Disease has new positive data for the second NDA attempt (and it has a significant advantage over existing therapies) and the option agreement with AbbVie could lead to significant milestone payments. - Aldeyra Therapeutics Has Data To Trigger AbbVie Partnership Elanco Animal Health ( ELAN ) - Longtime analyst Arthur Frentzel highlights the favorable valuation, strong growth, robust pipeline, improving cash flow and progress in paying down debt. - Elanco Animal Health: Positioned For Success Financials Capital City Bank ( CCBG ) - River Capital Investor , who focuses on under-covered companies, highlights this misunderstood regional bank with 100% upside - it has a strong deposit base with a low costs of funds, there are tailwinds from loan/security repricing over the next few years and management has a history of strong capital allocation.
- Capital City Bank: Premium Regional Bank Trading At Depressed Valuation OTC Markets Group ( OTCQX:OTCM ) - Longtime analyst Eric Nickolaison says the FCF yield looks attractive considering the asset light business and operating leverage, it has been able to grow free cash flow at a good rate (which it returns to shareholders through dividends and buybacks) and it has a strong economic moat and pricing power. - OTC Markets: Underfollowed Dividend Co., Attractively Priced PRA Group ( PRAA ) - Longtime analyst Jeremy Blum says PRA Group is one of the few countercyclical stocks out there and a turnaround story - after losing money in 2023, it is at an inflection point, returning to much better operating results, and there is a disconnect from the lower stock price despite the significant increase in the analysts’ average EPS estimate for 2024.
- PRA Group: A Turnaround And A Hedge For An Economic Slowdown Komercní banka ( OTCPK:KMERF ) - Martin Novak , a professional equity research analyst focused on long/short equities, highlights this under the radar idea with catalysts including a better fundamental outlook (with a ROE of 15%), broadening of the net interest rate spread, high dividend yield, safe balance sheet, and cheap valuation. - Komercni banka: Your CEE Banking Play Communications WEBTOON Entertainment ( WBTN ) - Adrian Nunez who focuses on under-followed stocks, highlights the predictable revenue streams, leading position in the industry, highly sticky user base, and significant pricing power in a large TAM. - Webtoon: The Story You Don't Want To Miss Nexstar Media ( NXST ) - former buy-side analyst The Value Puzzle says NXST trades at a low valuation (6x FCF) due to concerns about the shrinking linear TV industry, however even within this industry, it is uniquely well-positioned and should produce above-average results.
- Nexstar Media: Well Positioned In A Highly Challenging Industry Technology Alarum Technologies ( ALAR ) - Reynard Buntoro , who looks for medium to long-term opportunities with a margin of safety, highlights its success in reaching profitability and improving fundamentals, and with the AI market projected to grow at a high rate, it is poised for more growth. - Alarum Technologies: Potential Opportunity In An Untapped And Growing Industry ( Editor’s note: Shares have fallen since the article was published ) EACO Corporation ( OTCPK:EACO ) - Longtime analyst Stephen Read says EACO trades at more than a 60% discount to its technology distribution peers while profitably growing at 10% for the past 14 years. - EACO: A Founder Led, Lesser-Known, And Expanding Electronic Components Business Digital Turbine ( APPS ) - Longtime analyst Cobiaman says the core business should improve when handset sales come back, the alternative app stores could provide a big boost to the business, and as it delevers the balance sheet, the stock should continue to rise.
- Digital Turbine: Taking Off, A Lot Of Upside Remains Consumer Staples Mama's Creations ( MAMA ) - Longtime analyst Robbe Delaet says MAMA is a defensive growth stock, operating in the resilient packaged food industry and benefits from a structural trend to deli foods and has a history of strong growth and an impressive new management team. - Mama's Creations: Prepare For An Uncertain Economy With This Defensive Growth Stock Estée Lauder ( EL ) - Longtime analyst Heisenberg View says at the current price, past overly optimistic scenarios are no longer priced in, providing an opportunity to buy a great business going through a turnaround. - Estee Lauder: From Adored To Rejected - Let's Look Under The Facemask Consumer Discretionary Regis ( RGS ) - William Charters , who has 20 years of stressed and distressed investing experience throughout the capital structure, says RGS is undergoing a successful turnaround and a loan from a new lender reduced debt and interest costs (and it has the potential to continue cutting operational costs), allowing for significant free cash flow.
- Regis: A Compelling Turnaround Malibu Boats ( MBUU ) - Ex-hedge fund analyst Conviction Research says the current valuation offers an attractive entry point as its vertically integrated business model and premium branding provide a competitive edge while the new CEO and potential rate cuts by the Fed could drive profitability and growth recovery. - Malibu: Hidden Value With Catalysts La-Z-Boy ( LZB ) - Value investor Bee Spoke Investing says despite a challenging economic environment, it posted relatively strong results, it maintains a competitive edge through brand strength, product quality, and customer loyalty, and strategic initiatives position it for sustainable growth and profitability. - La-Z-Boy: Reclining Comfortably Amidst Industry Headwinds, Reiterating Our Buy Rating Advance Auto Parts ( AAP ) - Vera Glebova , who focuses on growth at a reasonable price ideas, says industry trends and potential catalysts, along with historically low valuations, present an opportunity.
- Advance Auto Parts: Value Over Everything ( Editor’s note: Shares have fallen since the article was published ) Duolingo ( DUOL ) - Longtime analyst The Prospector says DUOL is a growth stock with impressive financial performance, strong user growth and an attractive valuation. - Duolingo: Q2 2024 Offers More Compelling Reasons To Buy Now NIKE ( NKE ) - Winged Investor , who looks for value and growth ideas with a long-term horizon, says the current valuation offers an opportunity to buy a wonderful business with a strong moat at a fair price. - Nike: Swoosh On Sale Industrials Vicor ( VICR ) - Longtime analyst John Dillon says it trades at a much more reasonable multiple after the sell-off with a strong balance sheet and history of strong cash flow, while insider buying and a new buyback program show management's confidence in its future.
- Vicor Is Poised To Reenter The AI Market With $1B In Capacity And Enabling Technology NET Power ( NPWR ) - Asset manager Tuaev Levan says there is ~70% upside for this clean energy technology company as its new power plant allows for significantly reducing CO2 emissions and increases the efficiency of the power plant. - NET Power: The Risky Bet On New Energy Technology Hikari Tsushin ( OTCPK:HKTGF ) - Longtime analyst Cassiopeia Value Investing highlights this under the radar idea - this is an inexpensive stock that rewards investors with quarterly payouts, annual buybacks and long-term compounding. - Hikari Tsushin: A Quality Compounder From Japan Materials Nanophase Technologies ( OTC:NANX ) - Longtime analyst Anthony Ruben says sales, backlog, and production capabilities have all grown rapidly, and it has installed the equipment and systems to profitably produce its much in-demand products.
- Nanophase Technologies: Explosive Growth And Appreciation Energy Tidewater ( TDW ) - Longtime analyst Finsight Funds says Tidewater is the largest global OSV operator with great cash flows in an industry with many tailwinds, while management is committed to share buybacks and earnings-accretive strategies. - Tidewater: Bullish Momentum Should Continue For This Energy/Shipping Play Noble ( NE ) - Value investor Anantdeep Singh says the sell-off is a buying opportunity - it has a history of strong revenue growth and a high EBITDA margin while the merger with Diamond is expected to bring revenue and cost synergies, reduce concentration risk and make the joint entity a market leader. - Navigating Through The Storm: Noble Corporation's Undervalued Potential Utilities Hawaiian Electric Industries ( HE ) - Longtime analyst Robert Howard, CFA says shares look to be trading at a discount to its post-settlement valuation and the settlement gives more certainty to the outlook.
- Valuing Hawaiian Electric Industries Duke Energy ( DUK ) - Longtime analyst George Fisher says it has geographic diversity, favorable regulatory oversight, and a reasonable growth profile, and should be considered as a high quality, core utility holding at any point throughout the economic cycle. - Duke Energy: Market Diversity And Regulatory Oversight Wins Long-Term Real Estate NexPoint Residential Trust ( NXRT ) - Dividend Hiker , who focuses on value and dividend ideas, says despite short-term headwinds, its strategy of upgrading units, diversifying markets, and reducing debt makes it an attractive pick for investors seeking income and value. - NexPoint Residential Trust: Still Attractive After Q2 Results Inclusion Criteria: The above ideas were objectively compiled based on the set criteria.
Exclusions include new Seeking Alpha analysts, broad market calls, crypto ideas, leveraged ETFs, and stocks that were repeat recommendations by the analyst. Thanks for reading. This account ( Rare Stock Picks ) will publish future iterations of this report in the upcoming months.
If you missed our Rare Stock Picks from July, you can find it here ..
