Wall Street’s Best Analyst Turns Bullish on These 2 Stocks

2 years ago 432

For retail investors, seeking coagulated clues to the probable movements of the equity markets, the large measurement of published investigation from the Wall Street experts is simply a blessing, making disposable everything the capitalist needs to cognize to commercialized successfully. But it comes with a price. The sheer quantity of information progressive is astir intolerable for the non-expert to parse, but however to cognize which of the 7,700 banal pros is the champion to perceive to?

A look astatine the Top Wall Street Analysts ratings from TipRanks tin wide that air. The database shows the 100 champion analysts from the Street’s concern and banking firms, and ranks them by specified factors arsenic their wide occurrence complaint and the mean instrumentality their calls person generated successful the past year. These are cautiously chosen measures, arsenic they straight bespeak the analyst’s occurrence successful reviewing stocks.

And by those measures, 1 Wall Street pro stands taller than the rest. Quinn Bolton, from Needham, holds the #1 ranking among his peers, based connected the 82% accuracy of his banal ratings, and the 54% mean instrumentality those calls brought for investors who followed them. We’ve utilized the information tools astatine TipRanks to look up the details connected 2 of Bolton’s picks, to find retired what the Street’s champion expert looks for erstwhile helium goes bullish connected a stock.

Advanced Energy Industries (AEIS)

We’ll commencement with a tech company. Advanced Energy designs, develops, and markets the tech hardware that makes everyone else’s products work. The institution has an extended enactment of plasma powerfulness generators, precocious voltage powerfulness supplies and amplifiers, debased voltage powerfulness proviso units, somesthesia measurement devices, electrostatic measurement instruments, and state sensors, each captious components for a assortment of applications successful information centers, manufacturing, semiconductor production, and telecom.

The worth of this niche tin beryllium seen successful the company’s caller yearly revenues – which anterior to this year’s proviso concatenation bottlenecks were consistently rising. The apical enactment for fiscal 2019 was $718.9 million; successful fiscal 2020, that roseate to $1.45 billion. For the archetypal 3 quarters of 2021, however, the company’s gross is astatine $1.06 billion, and connected way to travel successful conscionable nether past year’s total.

Looking astatine the caller 3Q21 report, we find that the apical enactment of $346 cardinal was down some sequentially and year-over-year (by 4% and 11% respectively) – though it did bushed the midline of the company’s ain erstwhile guidance. EPS was reported astatine 89 cents, besides supra the guidance midline – but down 46% yoy.

The sliding revenues and earnings, and the proviso chain/production problems down them, spooked investors this year, and AEIS shares are down successful the past 12 months. The banal has been highly volatile implicit the people of 2021, but the downward inclination was clear; it has mislaid 28% since its January peak.

Bolton, for his part, remains bullish connected the stock. He writes, “Due to constraints of definite semiconductor components, AEIS gross disappointed expectations successful 2021 and the company's shares underperformed…. As we look into 2022, we judge amended constituent availability volition alteration AEIS to statesman to drawback up connected pent-up request for its powerfulness conversion systems (backlog has astir tripled since 4Q20). As gross recovers, we spot beardown GM and OM leverage driving NG EPS to $6.00 oregon much connected an annualized ground by year-end 2022 with annualized net powerfulness increasing further to $7.00+ successful 2023. As investors summation assurance successful this net power, we judge AEIS is apt to outperform peers.”

In airy of this position, Bolton upgrades his stance connected the shares to from Neutral to Buy, and helium sets a $120 terms people which indicates country for 37% terms appreciation successful the twelvemonth to come.

Not everyone connected Wall Street is arsenic upbeat connected Advanced Energy arsenic the Needham analyst; the banal has 7 reviews, which see 4 to Buy and 3 to Hold, supporting a Moderate Buy consensus. The shares are selling for $89.05 and their $106.29 mean terms people indicates an upside of 19% for adjacent year. (See AEIS banal investigation astatine TipRanks)

ACM Research (ACMR)

How bash you specify a captious industry? We can’t get by without automobiles successful today’s world, truthful they’re essential. But cars won’t spell without semiconductor chips installed successful their onboard machine and sensor systems, making the chips indispensable to the conveyance industry. And the chips won’t deed the marketplace without an array of specialized manufacturing tools and tech that makes it imaginable to nutrient the silicon wafers. This deeper level of indispensable manufacture is wherever ACM Research exists. The institution is simply a developer of bedewed processing technology, a important signifier successful each semiconductor manufacturing. Without ACM’s proprietary exertion and precocious tools, it would beryllium intolerable adjacent to make a axenic silicon wafer to commencement the spot process.

Looking astatine the company’s latest quarterly statement, we spot that the Q3 study enactment the apical enactment astatine conscionable implicit $67 million, up 40% yoy and the highest level successful implicit 2 years. On earnings, adjusted EPS came successful astatine 56 cents, up from 42 cents successful the year-ago quarter. Gross margins successful the 4th roseate from 42% to 44% yoy.

In an important caller development, the institution announced astatine the commencement of December that it had received orders for a preliminary shipment of tools and wafer cleaning exertion for a large US-based semiconductor manufacturer. The archetypal bid to this lawsuit (name not disclosed) is acceptable for 1Q22, arsenic an valuation bid to corroborate ACM’s suitability for the user. Production tools for a high-end manufacturing enactment are scheduled for 2Q22. The determination marks a large displacement of ACM’s accent toward the US market.

This is different banal that has struggled successful the marketplace this year. The stock terms has been highly volatile and aft peaking adjacent $140 successful February has tilted into the red.

Nevertheless, Needham’s Bolton believes the stock’s existent valuation represents an accidental and helium sees the company’s show and aboriginal contracts arsenic the cardinal points. He writes, “…we judge the existent stock terms does not reasonably bespeak maturation expectations for the company. We judge the communicative is shifting from a azygous conception (wet clean) China play among WFE stocks toward a multi-product, planetary enlargement communicative wrong the group.”

He goes connected to enactment that ACM’s shipments to caller customers are an fantabulous starring indicator of aboriginal revenue, and past elaborates connected the company’s incipient displacement distant from its China business: “During 4Q21 alone, the institution has announced plan wins with 4 planetary IC manufacturers including 1 successful the U.S. Management's strategy is to present the company's tools (ex: ECP, SAPS, Ultra C pr bedewed strip, and furnace) astatine these manufacturers' Asia-based facilities with acceptance of the eval tools starring to further accumulation orders astatine different facilities extracurricular the region.”

Bolton’s comments enactment his Buy standing connected the banal – an upgrade from a erstwhile Neutral. He sets a terms people of $100, suggesting a one-year upside imaginable of 29%. (To ticker Bolton’s way record, click here)

While determination are lone 3 caller reviews of this banal connected record, they are each successful statement – and bullish, making for a unanimous Strong Buy expert statement rating. The shares are presently trading for $77.62, and the $119 terms people is adjacent higher than Bolton’s, and implies a 53% upside successful the adjacent 12 months. (See ACM banal investigation connected TipRanks)

To find bully ideas for stocks trading astatine charismatic valuations, sojourn TipRanks’ Best Stocks to Buy, a recently launched instrumentality that unites each of TipRanks’ equity insights.

Disclaimer: The opinions expressed successful this nonfiction are solely those of the featured analysts. The contented is intended to beryllium utilized for informational purposes only. It is precise important to bash your ain investigation earlier making immoderate investment.

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