This past week proved yet again that stocks do not just rise forever and ever. Investors are coming to grips with the notion that a bond purchase tapering from Ben Bernanke and the Federal Reserve will come into play likely even before the end of 2013. Now investors are having to look for value and growth opportunities that may be overlooked or undiscovered, as well as opportunities that come from certain trends being taken down too much. We have identified several key analyst calls in the last week, all of which would be serious game-changers if they come about.
Geron Corp. (NASDAQ: GERN) had a narrower than expected loss. The company has been plagued since its business came under fire after losing its stem cell leadership entirely. Now it is developing imetelstat as a first-in-class telomerase inhibitor in hematologic myeloid malignancies. Piper Jaffray’s upgrade to Overweight from Neutral sent shares flying higher. Even after closing up 16% at $1.49 on the second highest trading volume day of 2013, this implies upside of about 170%. That is not just a call for a double and then some, that is $1.01 higher than its 52-week high of $2.99 and would be the highest price since July of 2011 if it plays out.
Potash Corp. of Saskatchewan (NYSE: POT) and the rest of the players like Mosaic Co. (NYSE: MOS) and Intrepid Potash Inc. (NYSE: IPI) have all been battered and bruised with massive drops since the Uralkali news out of Russia two weeks ago. The brokerage firm BGC Financial upgraded Potash Corp. and the other two to Buy from Hold. The price targets were somewhat impressive, but this was a reversal call of “enough is enough” after the firm had downgraded it the week before. There had been at least six downgrades here before this upgrade reversed the cycle. It still was not enough to keep short sellers from pounding on it Friday, but this could be the start of a “rationalization” coming into play here in the potash sector.
SunEdison Inc. (NYSE: SUNE) was raised to Buy from Neutral with a $10 price target at BofA/Merrill Lynch, but this was right after a huge drop. The team’s sum of the parts analysis included muted but improving expectations in 2014. The old MEMC closed at $7.38 on Friday, leaving an implied upside of 35%, and we would say that this is a high upside call from the likes of a Merrill Lynch upgrade.
Tangoe Inc. (NASDAQ: TNGO) is a small cap stock that Deutsche Bank included in a sector projection of which stocks would win from cloud computing. What stood out here is the firm’s $28 price target. If this on-demand communications management platform provider lives up to its promise, then the Deutsche Bank call of 60% upside at the time would still leave about 53% upside from the $18.22 close on Friday.
Tremor Video Inc. (NYSE: TRMR) had two or three key events this last week. First is that it beat earnings, second is that its rival YuMe came public in a very mixed reception IPO with a lower price, and third is that Adap.TV was acquired by AOL Inc. (NYSE: AOL). The team at Oppenheimer maintained an Outperform rating on this recent video ad IPO, but its target remained very high up at $12.00. Jefferies also remained positive saying it could be acquired, and it too has a $12 price target. That leaves two analysts expecting just over 50% upside from Friday’s closing price of $7.98.
If you are worried about a market crash, Marc Faber has plenty of gloom and doom for you. He sees a 1987 style stock market crash coming of 20% or so that would wipe out all of the 2013 gains. We have a technician who has long-term upside of over 50% in the S&P 500, and the 20% correction would still not take out the lowest reversal point for a Fibonacci analysis.