The stocks that are primed for gains in 2021

Foto

When coronavirus fades, the general economy is expected to bounce back. Getting to specifics, Credit Suisse Chief U.S. Equity Strategist Jonathan Golub sees economic momentum moderating post-pandemic, and sets a one-year target for the S&P 500 of 4,050, or 10.5% above current levels.

Considering what investors can expect, Golub writes, “As we look toward 2022, the virus will be a fading memory, the economy robust, but decelerating, the yield curve steeper and volatility lower, and the rotation into cyclical largely behind us.”

In the meantime, investors want to know where to put their money now – which means Wall Street’s analysts are also busy finding the stocks that are primed for gains in the next 12 months.

Using TipRanks database, we’ve pulled the details on three stocks that combine a Strong Buy consensus rating with a Perfect 10 from the Smart Score — a single-digit amalgamated score based on the collated data from TipRanks. These are stocks that have impressed the analysts – and show strong signs of near- to mid-term gains based on the data analysis algorithms.

Nomad Foods (NOMD)

A UK-based distributor in the frozen foods niche, which has become a vital part of the modern food chain. Frozen foods offer variety, freshness, and relatively easy storage – all of which has brought Nomad over $2.4 billion in annual revenues

The COVID crisis prompted the public to eat at home more, and that was good for the grocery industry generally and frozen foods specifically. The company’s Q3 earnings, at 35 cents per share, are up 25% from one year ago. The company posted 576 million Euros (US$685 million) on the top line, implying a 12% yoy growth.

Rackspace Technology (RXT)

Rackspace Technology is a cloud computing company out of Texas, offering data management and data security, across applications and at any scale. Rackspace’s customer base is global, and the company has offices in Australia, Singapore, India, Germany, and the UK.

Having its IPO just this part August in the stock markets, the company sold 33.5 million shares at $21 each, the low end of the target range, and has been volatile since.

The third quarter results were somewhat mixed for RXT. The company reported a 13% year-over-year gain in revenue, to $682 million, with a quarterly record of $315 million in bookings – an impressive 64% yoy gain. Net income, however, registered a 54-cent per share loss. That loss came even as Core Revenue – Multicloud Services and Apps & Cross Platform combined – gained 18% compared to the year-ago quarter.

Analysts are willing, for now, to forgive Rackspace’s slightly shaky entry into the stock markets.

EQT Corporation (EQT)

EQT Corporation, the largest natural gas producer in the US with operations in the Appalachian Basin in the states of Ohio, West Virginia, and Pennsylvania. The company holds lease and exploration rights more than 1 million acres, and has nearly 20 trillion cubic feet in proven reserves.

Unfortunately, low energy prices have taken a toll here. Except for 1Q20, EQT has been posting net losses since the second quarter of last year. The most recent report, for Q3 2020, showed a net EPS loss of 15 cents per share. While the loss was less than expected by the analysts, it was deeper than the year-ago quarter.

Despite the recurring quarterly losses, EQT shares are up an impressive 34% so far this year – and there are still 5 weeks left. The gains have completely erased losses taken at the start of the corona crisis, and reflect investor confidence in the gas industry as a vital utility.