Well, last week was lousy, and perhaps some will be recouped this week as the market takes another swing at the upside. One thing’s for sure, the massive sell-off last week has put some outstanding growth stocks on sale, and investors with some dry powder may be able to buy stocks that have substantial upside potential for the rest of the year.
Jefferies is out with its first group of growth stocks to buy this year, and the list has not only some timely picks, but companies that have been knocked to levels that are providing some of the best entry points since last fall. We highlight five that investors should consider now, especially with the fourth-quarter earnings results right around the corner.
This company is a potential takeout target. BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX) designs, optimizes and develops novel small molecule drugs that block key enzymes involved in rare diseases. BioCryst’s ongoing development programs include oral plasma kallikrein inhibitors for hereditary angioedema; avoralstat BCX7353 and other second generation compounds; and BCX4430, a broad-spectrum viral RNA polymerase inhibitor.
Jefferies notes the stock has been weak recently but feels the results of the next OPuS-2 results, which is the company’s clinical trial of BCX4161 in patients with hereditary angioedema, will show much better efficacy than the first clinical results. The firm also thinks there has been progress with the avoralstat formulation, which may enable twice a day dosing versus three times.
The Jefferies price target for the stock is $14. The Thomson/First Call consensus price target is $16.67. The shares closed Monday at $7.79.
This solid health care sector stock has good upside potential, and Jefferies thinks the growth potential is not appreciated. 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 late last year and found that only about 25% have replaced their electronic health record or EHR systems. An EHR is a digital version of a patient’s paper chart, a real-time, patient-centered record that makes 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 company reported a third consecutive revenue miss back in November. On the bright side, the bookings were much stronger than expected. Jefferies reports that a record 39% of bookings were generated from new clients. While forward guidance also disappointed, it’s clear this is a work in progress and patient investors will be rewarded as PopHealth spending accelerates in 2016 and beyond.
The Jefferies price target is set at $78, and the consensus estimate is $70.34. The stock closed Monday at $57.26.
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