More and more, the companies that we cover on Wall Street are starting to agree that while the future is still bright for the U.S. economy, stock market gains may be much lower than the norm over the last 10 years. When that is the case, investing strategies often shift from indexing to a more disciplined stock-picking routine, and that’s when investors need solid growth ideas.
Each week Jefferies highlights the firm’s top growth stocks to buy. While these companies are better suited for accounts that have a higher risk tolerance, they all make good sense now, and all have outstanding upside potential. We found four that look extremely good now.
This company remains a top pick on Wall Street and the Jefferies team 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.
The Jefferies analysts don’t expect any big announcements from Activision, which does not host a press event but will have a large presence on the E3 show floor this week with playable game demos. They do expect to hands-on time with key Activision Publishing games, most notably Call of Duty Black Ops 4 (and its new Blackout mode) but also Destiny 2.
They also noted this in the report:
With its new Blackout mode, we think Black Ops 4 looks like the most exciting Call of Duty in years and we are optimistic ATVI will have a strong E3. In our group meeting we expect investors will focus on 1) upcoming mobile game launches, 2) the nascent advertising business, and 3) eSports.
Shareholders are paid a small 0.51% dividend. The Jefferies price target is $86, and the Wall Street consensus target is posted at $75.88. The stock closed Friday at $74.29.
This high profile old-school software company and has been posting outstanding earnings. Adobe Systems Incorporated, Inc. (NASDAQ: ADBE) operates in three segments: Digital Media, Digital Marketing, and Print and Publishing. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content.
Top Wall Street analysts see the company benefiting from Artificial Intelligence in AI platform, predictive analytics, automation bots, speech recognition and Natural Language Processing or NLP, and image recognition. Some on Wall Street see earnings-per-share increasing a solid 30% or more for 2018.
The Jefferies team feel the company deserves a premium multiple to their peers due to Adobe’s strong competitive position in the creative space and above-average growth prospects.
The Jefferies price target is $265, and the Wall Street consensus is set at $239.60. The shares closed Friday at $251.21.
This is another biotech/medical technology that Jefferies started coverage on with a Buy rating late last year. AxoGen Inc. (NASDAQ: AXGN) offers surgical solutions for peripheral nerve injuries. The Company provides products and education to improve surgical treatment algorithms for peripheral nerve injuries. Its portfolio of products includes Avance Nerve Graft, AxoGuard Nerve Connector, AxoGuard Nerve Protector and Avive Soft Tissue Membrane.
The company also offers the AxoTouch Two-Point Discriminator, and AcroVal Neurosensory and Motor Testing System. These evaluation and measurement tools assist healthcare professionals in detecting changes in sensation; assessing return of sensory, grip and pinch function; evaluating treatment interventions, and providing feedback to patients on nerve function.
The Jefferies price target is posted at $45, and that compares with the Wall Street consensus figue which is set at $44. The stock closed trading on Friday at $48.40.
This is a company that has been on fire and could still have big upside. Exact Sciences Corporation (NASDAQ: EXAS) is a molecular diagnostics company focused on the early detection and prevention of the deadliest forms of cancer. The company has commercialized a next-generation non-invasive colorectal cancer (CRC) screening test, Cologuard (CG), which received concomitant FDA approval and Medicare coverage in 2014.
Cologuard is included in the colorectal cancer screening guidelines of the American Cancer Society and stool DNA is included in the U.S. Multi-Society Task Force on Colorectal Cancer. The stock is down almost 30% from highs posted in January and look like a great buy at current levels.
The Jefferies team met with management recently and noted this.
We hosted the CEO at the Jefferies 2018 Global Healthcare Conference. We came away incrementally positive as we believe last week’s updated ACS guidelines will potentially lead to a faster label expansion for Cologuard. The company already has data to justify expanding Cologuard’s label to include the 45-49 year old group. An expanded population could add ~$3 billion to Cologuard total addressable market.
The Jefferies price objective remains at $60 but could move higher soon, and the Wall Street consensus is posted at $62.60. The shares closed Friday at $63.26.
Four top growth stocks to consider that could be great trades for the balance of 2018, and good holds into the coming years, as they all stand to have continued revenue growth, and are solid players in their respective sectors.