With the market seemingly back in a more bullish mode, and for the most part the early earnings numbers looking solid, a fourth-quarter move higher looks like it could be in the cards. Despite the recent rally, the Dow Jones Industrial Average and the S&P 500 are still down for the year, and it will take a big move in the markets to just get a year of positive low to middle single-digit gains.
A new research report from Jefferies focuses in on some growth stock calls that are decidedly more aggressive, but that also could have tremendous upside potential. While these are more suitable for accounts with a higher risk profile, they all make good sense for patient growth investors.
This is a solid health care sector company that has good upside potential. Cerner Corp. (NASDAQ: CERN) solutions assist clinicians in making care decisions and enable organizations to manage the health of populations. The company also offers an integrated clinical and financial system to help health care organizations manage revenue, as well as a wide range of services to support clients’ clinical, financial and operational needs.
Jefferies surveyed hospitals and found that only about 25% have replaced their electronic health record (EHR) systems. An electronic health record is a digital version of a patient’s paper chart. EHRs are real-time, patient-centered records that make information available instantly and securely to authorized users. The analysts feel that quality vendors like Cerner will continue to take share in these replacements.
The Jefferies price target for the stock is $78, and the Thomson/First Call estimate is $75.70. The stock closed Friday at $65.25.
This company primarily provides software product development services worldwide. EPAM Systems Inc. (NASDAQ: EPAM) offers product research, design and prototyping, product development, component design and integration, full lifecycle software testing, product deployment and end-user customization, performance tuning, product support and maintenance and porting and cross-platform migration.
Many analysts on Wall Street believe that EPAM is one of the top new breed vendors with the largest social, mobility, analytics and cloud exposure, and one of the companies best positioned to generate hyper-growth. Jefferies recently met with the CEO and feels that despite the macro volatility medium term, expectations of 20% to 25% compounded annual growth rate are still safe. With it trading at 22 times 2016 calendar estimates, they also like the valuation.
While the stock is up huge over the past year and recently removed from the Franchise Picks list, the analysts still love this stock long term. Investors maybe should scale buy the stock, looking for any weakness.
The Jefferies price target is $95, and the consensus target is $78.64. Shares closed Friday at $79.21.