What a year 2019 was for investors. The major indexes are all up over 20%, and markets are hitting record highs. While it’s likely 2020 may not have quite the same gusto, with a strong economy generating jobs and the lowest unemployment in 50 years, we should at least be set for another positive year.
The major firms on Wall Street are generating lists of top picks for 2020 and posting estimates for market gains, and while so far nobody is calling for the double-digit gains we saw this year, most that we cover are generally positive, citing positive trade war results and the continued strength in the consumer. Toss in the possibility for some improvement overseas, and high single-digit gains look possible.
A new SunTrust report reveals the firm’s 21 top small and mid-cap picks for 2020, all of which the analysts feel have 20% or more upside potential. The report noted this:
So after one of the best years in two decades, what’s next for 2020? We polled our experienced 34 research analysts and asked for their highest conviction SMID cap ideas with at least 20% upside for 2020, and the ideas we received are as diverse as the research department. To appeal to a wide swath of institutional investors, these high conviction ideas are diverse, with representation from value, growth, and momentum styles as well as several different industry verticals within our SMID cap universe: from Biotech to Consumer Products to Software to Energy.
We screened the SunTrust list and picked the five companies with the biggest upside to the firm’s price target. All are of course rated Buy.
This is SunTrust’s top pick for small-cap portfolio managers. eHealth Inc. (NASDAQ: EHTH) engages in the provision of internet-based health insurance agency services for individuals, families and small businesses. It operates through the Medicare and the Individual, Family, and Small Business segments.
The Medicare segment consists primarily of commissions earned from the sale of Medicare-related health insurance plans. The other segment includes commissions earned from the sale of individual and family and small business health insurance plans and ancillary products sold to non-Medicare-eligible customers. eHealth (through its subsidiaries) is licensed to sell health insurance in all 50 states and the District of Columbia.
SunTrust has a massive $150 price target on the shares, while that Wall Street consensus target is $116.45. The stock last traded at $92.65 a share.
This off-the-radar biotech could be poised for a huge 2020. Momenta Pharmaceuticals Inc. (NASDAQ: MNTA) focuses on the discovery and development of novel biologic therapies for the treatment of rare immune-mediated diseases. Its products include the Glatiramer acetate injection and Enoxaparin Sodium injection.
One big positive for investors is that insiders have been buying shares of the company recently, and that could bode extremely well for 2020 and beyond, as insider buying is always a positive.
We evaluated the FcRn landscape in a deep-dive and concluded that Momenta likely has the most potent FcRn therapy: it has the greatest reduction in IgG at lower doses and we believe this could translate into better efficacy and smaller volumes for IV and SC forms. We believe Momenta’s approach to developing molecules in the FcRn and IVIg space is unique. First, they create the molecule to have the characteristics they want, while others in-license their drugs. They also chose their indications by first looking at the biology.
The SunTrust price objective is a lofty $29, while the consensus target is $25. Tuesday’s last trade came in at $18.07.
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