Investing

Red-Hot Tech and Biotech Companies Highlight Jefferies Top Stocks to Buy

Increasingly, top companies that we cover on Wall Street are starting to agree that the volatility the stock market is encountering now, along with the beating the economy is taking, should fade in the second half of 2020. However, the future may be one of stock market gains that are much lower than the norm has been over the past decade. When that is the case, then investing strategies often shift from indexing to more disciplined stock picking, and that’s when investors need solid growth ideas.

Jefferies highlights the firm’s top growth picks to buy each week, and this week is no exception. While these stocks are better suited for accounts that have a higher risk tolerance, they all make good sense now and have outstanding upside potential. We found five stocks among Jefferies top U.S. growth calls for this week that look extremely attractive now. Remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Activision Blizzard

This is a top gaming pick on Wall Street and Jefferies remains very positive on the shares. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide.

The company develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers. Its legacy franchise Call of Duty game continues to be hugely popular. The analysts said this when discussing earnings last week:

Company reported last week. We advised investors to stick with Activision, as numbers will likely move higher throughout the year and new releases are on the horizon beyond 2020. Numbers will likely need to continue to move higher for the stock to work from here, but second half guidance looks conservative and new Blizzard titles are on the horizon post 2020 (Overwatch 2, Diablo 4). The company remains our top pick.

Investors receive a 0.55% dividend. Jefferies has an $80 price target on the shares, while the Wall Street consensus target is $69.71. Activision Blizzard stock closed Monday at $75.46, up over 3% on the day.

GoDaddy

This company is probably the most well known for constructing websites. GoDaddy Inc. (NYSE: GDDY) is a technology provider to small businesses, web design professionals and individuals. It delivers cloud-based products and personalized customer care. The company operates a domain marketplace, where its customers can find the digital real estate that matches their idea. It provides website building, hosting and security tools to help customers construct and protect their online presence.

GoDaddy provides applications that enable connecting to customers and managing businesses. It also provides search, discovery and recommendation tools, as well as a selection of domain name for ventures. It provides productivity tools, such as domain-specific email, online storage, invoicing, bookkeeping and payment solutions to run ventures, as well as marketing products.

Jefferies said this after the company reported results for the quarter:

Company reported last week. Go Daddy proved again that it can deliver consistent execution in any weather. Even while fighting a pandemic, the company can be a low teens revenue grower, with steady free cash flow margin improvement, plus a $500 million reloaded share buyback program after $1 billion purchased over the past year. Go Daddy seems to be getting more nimble with its product offerings, including a new freemium option, although we would like to see a broader sell through across the portfolio.

Jefferies raised its $85 price target to $90. The consensus target is $79.62, and Go Daddy stock closed at $75.47 on Monday.

HubSpot

This stock has rallied up from the March lows but looks ready to break out. HubSpot Inc. (NYSE: HUBS) is a cloud-based provider of inbound marketing tools such as website content management, blogging tools, email campaign, search engine optimization, social media monitoring and management, customer relationship management and others for small businesses and midsized companies.