SunEdison, Inc. (NYSE: SUNE) is so volatile and risky that we almost hesitated to even include this call. Still, the struggling maker of silicon wafers has high investor interest. The stock was maintained as Buy at Janney Capital Markets on Monday.
What stands out here is that the firm’s fair value estimate was cut to $17 from $20, which sounds almost crazy considering a prior $2.82 close and considering a Friday closing price of $3.36. That consensus price target of $15.75 seems like it is riddled full of holes now, and the 52-week range is $2.55 to $33.45.
The firm did acknowledge the much higher level of risk due to future uses of cash, but they do not see a liquidity event coming in SunEdison at this time in the company’s future.
For another view of risk here, UBS downgraded SunEdison to Sell from Neutral in the middle of the week and gave a $2.00 price target. Paying off most of a margin loan and a $350 million divestment in India might not be enough. This feels like one of those calls where a “fair value” just may seem too aggressive, and 24/7 Wall St. has worried that analysts just are not dropping their price targets fast enough.
Teladoc, Inc. (NYSE: TDOC) could have more than 50% upside if Oppenheimer is right here. The firm started the telemedicine service provider with an Outperform rating this last Tuesday and assigned a $31 price target. Teladoc’s prior close was $19.28 and shares closed out the week at $19.52; and it has a post-IPO range of $15.32 to $35.42 and a consensus analyst price target of $35.88.
Teladoc shares have come off highs so much after a hot IPO in part from regulatory risks. Oppenheimer thinks that is overdone, but investors have to understand that this is an emerging company and its leadership position in remote telemedicine services could fall apart or just not pan out like so many investors have hoped.
Universal Insurance Holdings Inc. (NYSE: UVE) has become a highly debated stock. The property and casualty insurance company has become the target of short sellers, and its short interest of 3.745 million shares as of November 13 may even be understated considering that this was a $30 stock back on that day.
Universal Insurance was listed as one of eight companies that destroyed its shareholders in the previous week, but Keefe Bruyette & Woods said enough is enough this last Monday. KBW raised its rating to Outperform from Market Perform, while cutting the price target to $28.00 from $35.00, versus a prior $18.47 closing price.
Universal Insurance shares were down almost 2% at $20.23 on Friday’s close, and its 52-week range is $16.50 to $37.49.
Investors need to understand that Universal may screen on the cheap side at less than 7-times earnings, but it is now a serious battleground stock where trading forces may override valuation metrics for some time. Another risk is that almost no research firms cover this stock with formal investment ratings.
Entellus Medical, Inc. (NASDAQ: ENTL) was maintained as Buy with a $27.00 price target at Canaccord Genuity on Tuesday. This was versus a prior $16.42 close and shares went out with a gain of 3.1% at $17.52 on Friday. The firm said that Entellus adds pediatric indication for XprESS Multi-Sinus Dilation system, but this 50% upside comes with thin volume and its $330 million market cap is paired off with a 52-week trading range of $14.72 to $28.81.
Canaccord Genuity’s call noted that the FDA clearance was slightly ahead of expectations in the first quarter of 2016. Entellus was said to be the only balloon sinus dilation company on the market currently able to treat adolescents.
There are risks here — new competition, being public less than a year, limited revenue history and operating losses are just some.
OK, so those were the most aggressive analyst calls from this last week that were tracked by 24/7 Wall St. Some of these companies have risks that are far greater than the traditional stocks most investors are used to. In fact, this week’s group of risky stocks with massive upside may just be one of the riskiest group of similar stocks we have covered in quite some time.