A big chunk of the S&P 500’s return is attributable to a handful of huge tech stocks. In fact, almost 40% of it comes from just seven companies. But don’t fret if you feel you’ve missed the boat on those magnificent stocks. They are not the only game in town.

Four New Stock Upgrades Investors Might Consider

In fact, Wall Street has some new ideas for investors looking for opportunities to potentially grow portfolios.

A number of investment firms upgraded their opinions on four stocks this morning – not one of them is a household name or trillion-dollar market cap tech giant. Investors looking for fresh new ideas might consider these four names.

Five Below

Five Below, Inc. (NASDAQ: FIVE) is a “value” retailer with about 1,500 store locations in more than 40 states. The product offering is targeted directly at school-aged kids and includes categories like candy and snacks, games and (low) tech gadgets, clothing and apparel, art and school supplies, and party favors and room décor.

This morning, Wells Fargo upgraded FIVE stock from “Equal Weight” to “Overweight” and raised the retailer’s price target to $180. With FIVE stock trading today around $150 a share, Wells Fargo’s target suggests 20% upside for new investors.

Part of the justification for the increased bullishness in FIVE may be the result of its impressive revenue growth. FIVE has improved revenues for the last five years at a compound annual growth rate (CAGR) of about 18%. Last year sales were approximately $3.6 billion – that’s not exactly kids’ stuff!

Manhattan Associates

Manhattan Associates, Inc. (NASDAQ: MANH) is in the IT services and consulting business. MANH designs, builds, and delivers software and cloud-based solutions for the warehousing, logistics, and supply chain industry – so moving everything tangible that businesses and people use and consume. MANH has operations around the world.

Investment banking firm, DA Davidson upgraded its investment rating on MANH to “Buy” from “Neutral” today. Analysts at the firm set a price target for the year ahead at $240. With MANH stock currently trading in the $210 range suggests upside potential of 14% to 15%.

When MANH last reported earnings they showed a better than 15% increase over the prior year. MANH stock delivers net margins close to 20% and with no long-term debt delivers a return on equity over 85%.

Trustmark

Trustmark Corporation (NASDAQ: TRMK) is a regional bank holding company that operates branches in the Southeast.  Today, Keefe, Bruyette & Woods upgraded TRMK stock from “Market Perform” to “Outperform.”

At the same time, the investment firm raised its price target on TRMK stock from $30 per share (right around its current price) to $36. For new investors that would suggest 20% upside. That return doesn’t include TRMK’s favorable dividend, which currently yields about 3.1%.

Based on a recent (January 2024) NYU Stern School of Business analysis of regional banks, TRMK boasts some impressive metrics. TRMK stock currently trades at about 12 times earnings. Regional banks generally are closer to 15.

Bank analysts also look to Efficiency Ratio (how well a bank uses its assets to generate revenue). TRMK comes in at about 67% vs. the average of close to 56% for other regionals. The same can be said of TRMK’s Cap Ratio. When TRMK last reported earnings its Cap Ratio came in at 12.42%. The average for regional banks is under 10%.

UDR

United Dominion Realty Trust or UDR, Inc. (NYSE: UDR) is a nationwide multi-family apartment owner and manager. UDR is a Real Estate Investment Trust (REIT).

Investment firm UBS today upgraded UDR to “Buy” from “Neutral” and set a 12-month price target of $44 on UDR stock. With UDR stock trading today around $38 a share, UBS’s increased target price represents a potential return of approximately 24% – and that is in addition to UDR’s nearly 4.5% dividend yield.

UDR has paid a dividend consistently since 1995 and increased the payout at a CAGR of 6.3% since 2010.

In its announcement about the UDR upgrade, UBS cited “increasing confidence in [UDR’s] rent growth trajectory at a favorable valuation.”

Adding to this positive investment thesis is that UDR is diversified across markets and price points in markets where it is 60% less expensive to rent than to own. Yet in those markets, URD’s renters earn an average annual household income of about $162,000.

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