If there is one thing that investors look for in growth stocks it is consistency. Companies that can continue to put out solid metrics over long periods make good additions to portfolios that have a long-term outlook. Plus, it is also important to remember that solid track records help when the inevitable market sell-off hits, as investors are far less likely to sell stocks that have performed well year in and year out.
A new JPMorgan research report highlights a basket of large cap secular growth stocks that all have passed muster as companies that have shown strong and consistent revenue growth over the past 10 years, even during the recession. The stocks also satisfied strict criteria laid down by JPMorgan that included metrics like high five-year sales compounded annual growth rates and low mergers and acquisitions contributions.
We further screened these stocks for those rated Overweight at JPMorgan and found four outstanding stocks to buy that had the largest upside to their price targets.
This company has finally put all the pieces together and has become an earnings juggernaut. Amazon.com Inc. (NASDAQ: AMZN) engages in the retail sale of consumer products in North America and internationally. It operates through the North America, International and Amazon Web Services (AWS) segments.
The company sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through retail websites. It also manufactures and sells electronic devices, including kindle e-readers, fire tablets, fire TVs and echo, as well as fire phones. It provides Kindle Direct Publishing, an online platform that allows independent authors and publishers to make their books available in the Kindle Store.
Amazon also serves developers and enterprises through the aforementioned Amazon Web Services, which provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses. AWS is the undisputed leader in the cloud now, and analysts see the company expanding and moving up the enterprise information value chain and addressing a larger total addressable market. The company has had numerous recent product announcements, including Aurora for relational database engine, Quicksight for business intelligence and AWS Database Migration Support Service.
The company’s revenue exploded in the first quarter, and top analysts noted that after years of very uneven profitability, they feel the company is really focusing on the bottom line. Amazon absolutely annihilated analysts’ expectations on both its top and bottom lines for the first quarter, thanks mostly to its growing retail business and new cloud services.
The JPMorgan price target for the stock is $915. The Thomson/First Call consensus price target is $801.95. Shares closed Wednesday at $713.23. There is almost 30% upside to the JPMorgan price target.
Many on Wall Street remain very bullish on this large cap biotech, and the stock is down a stunning 43% from highs printed in March of last year. Biogen Inc. (NASDAQ: BIIB) discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. Founded in 1978, Biogen is one of the world’s oldest independent biotech companies, and patients worldwide benefit from its leading multiple sclerosis (MS) and innovative hemophilia therapies.
Some analysts have acknowledged in the past that the company’s core MS drug market is facing challenges going forward, with most diagnosed patients now treated, payers limiting net benefits from price increases and competing entrants expected. With those issues in mind, the firm is still positive on Tysabri, especially for secondary-progressive multiple sclerosis, with upcoming clinical data a big factor.
The combination of cost reductions, in tandem with the still strong MS franchise, may not be as challenged by competitors as some on Wall Street think, but can help the company beat earnings estimates this year. With a strong pipeline the stock is a solid choice for aggressive growth investors. Biogen posted outstanding earnings for the most recent quarter and it remains a solid choice.
JPMorgan has a gigantic $401 price target. The consensus target is $345.50, and the stock closed Wednesday at $267.25. Biogen has almost 47% upside to the JPMorgan price target.