It’s mid-January now, and 2023 is into full swing. The vacations are behind us, and the longer term ahead of us has yet to be written – and what higher time than now to begin establishing a stock portfolio to hold into that future. The important thing to success stays the identical as all the time, finding the fitting stocks which can be primed for gains and solid returns. Recognizing them is the trick.
That’s where the Smart Rating is available in. Based on TipRanks’ advanced AI algorithms, the Smart Rating collects data on all of Wall Street’s publicly traded stocks – after which it sorts and collates them in response to a set of 8 aspects, each with a history of predicting outperformance. The aspects are averaged together, and the result’s a single-digit rating, on a scale of 1 to 10, that lets investors see at a look the ‘most important probability’ for any particular stock. Investors searching for the very best investment opportunities may gravitate to the Perfect 10s.
So, let’s turn to the Smart Rating, and use it to sort through the TipRanks database for a few likely winning stocks. In keeping with the info, each of those has a Perfect 10 from the Smart Rating, a Strong Buy consensus rating from the Street, and no less than 60% upside potential for the approaching 12 months. Let’s take a more in-depth look.
Clearfield, Inc. (CLFD)
We’ll start with Clearfield, a player within the tech industry where it focuses on the event, deployment, and expansion of fiber-optic broadband network systems. Clearfield manufactures and distributes equipment for the delivery, management, and protection of fiber optic communications; the Minnesota-based company dubs its platform ‘fiber to anywhere.’ Clearfield can boast of multiple million fiber port deployments yearly.
Clearfield’s product lines encompasses a variety of hardware for the installation of fiber optic networks, including frames & panels, cabinets & wall boxes, cassettes, terminals, test access points, and optical components. The corporate’s sales within the last reported quarter – Q4 of fiscal 12 months 2022, reported this past November – got here to $95 million. FY22’s top line got here in at $271 million. These numbers were up 110% and 92%, respectively, year-over-year.
At the underside line, Clearfield’s net income for fiscal ’22 was reported as $49 million, up from $20 million in fiscal ’21. The corporate’s diluted EPS for the 12 months, $3.55, was up 141% y/y. The work backlog, a metric that helps predict future work and revenues, was up 148% y/y, to $165 million.
Clearfield’s rapid growth has caught the eye of Cowen’s 5-star analyst Paul Silverstein, who writes: “CLFD has demonstrated impressive vision and execution in establishing a number one position amongst Tier 2 and three BSPs within the fiber protection, management and delivery solutions segment of the highly attractive FTTH broadband access market.”
“We see a variety of longer-term upside opportunities for Clearfield throughout the FTTH and bigger FTTP markets. These include FTTP fiber management product expansion equivalent to Clearfield’s recently introduced latest pedestals and its acquisition of Nestor Cables for fiber optic cables; FTTP customer expansion via latest and deeper penetration of Tier 1 CSPs and MSOs; and FTTP use case expansion into the MDU, FTTB and 5G FTTT market opportunities,” Silverstein added.
Every part that CLFD has going for it prompted Silverstein to rate the stock an Outperform (i.e. Buy). The cherry on top? His $141 price goal implies ~72% upside from current levels. (To look at Silverstein’s track record, click here)
Overall, all 4 of the recent Wall Street analyst reviews on this stock are positive, making the Strong Buy consensus rating unanimous. (See CLFD stock evaluation)
Rent-A-Center, Inc. (RCII)
From fiber optics we’ll turn to consumer retail, where Rent-A-Center (RAC) is a long-time leader within the rent-to-own area of interest. The corporate offers quite a lot of products to customers searching for rock-bottom pricing points. RAC’s stores feature the whole lot from consumer electronics, home appliances, furniture, and even computers through flexible lease-purchase agreements. The arrangement gives customers the immediate good thing about having the product – and an choice to buy at a reduced price when the lease is up. Rent-to-own gives down-scale consumers a probability to avoid long-term, high-interest debts, that will be especially crippling in today’s environment of rising rates of interest. RAC operates primarily through its network of brick-and-mortar stores, roughly 1,970 ultimately count, and likewise operates an e-commerce website.
Last 12 months was a tricky one for RAC. Revenues and earnings each showed several sequential declines, as consumers generally pared back spending in a high-inflation, high-interest environment. The corporate’s down-scale consumer base was particularly hard hit by those headwinds. The corporate’s most recently reported quarterly results, for 3Q22, showed a 13% year-over-year decline in revenue, to $1.02 billion, and a quarterly net loss, in GAAP terms, of 10 cents per share. In non-GAAP terms, RAC reported a diluted EPS profit of 94 cents; this was still down 38% y/y.
On interest to return-minded investors, RAC generated $412 million in money from operations in the course of the first three quarters of 2022. That total included $363 million in free money flow. The corporate’s strong money generation allowed it to repurchase $75 million price of shares during Q3 and October – and to take care of a gradual, high-yield dividend payment. The last dividend declaration, made in December for a January 10 payout, set the common share div at 34 cents. At that rate, the dividend annualizes to $1.36 per share and provides a yield of 5.4%, greater than double the common found amongst S&P-listed stocks.
In his coverage of this stock for Craig-Hallum, analyst Alex Fuhrman sees reasons for investors to choose up RCII shares, explaining: “Rent-A-Center is a best-in-class lease-to-own (LTO) operator that ought to be one in all the most important beneficiaries of falling inflation. High inflation has been crushing consumer spending on high-ticket items amongst subprime customers, and RCII has felt that pain in a giant way…. With the stock already down almost two-thirds from its 2021 peak, we predict the worst-case-scenario is already priced into the shares and Rent-A-Center is well positioned for significant growth in the subsequent economic cycle.”
“Within the meantime,” the analyst added, “RCII’s dividend yield gives investors a compelling incentive to attend. With signs already emerging that inflation is easing and consumer credit is tightening, investors may not should wait long.”
To this end, Fuhrman rates RCII shares a Buy, and his price goal, of $40, suggests the stock will gain ~60% on the one-year horizon. (To look at Fuhrman’s track record, click here)
The Craig-Hallum view just isn’t the one upbeat take here; the stock has 5 recent analyst reviews on record, they usually break down 4 to 1 in favor of Buys over Holds, backing up the Strong Buy consensus rating. (See RCII stock evaluation)
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Disclaimer: The opinions expressed in this text are solely those of the featured analysts. The content is meant for use for informational purposes only. It is extremely essential to do your individual evaluation before making any investment.