Even in the best of circumstances, predicting which way the market will move is difficult. With the third-quarter earnings season well underway, few corporations have moved drastically up or down, owing to unexpected reports, analyst evaluations, company announcements, and other growth and risk variables.
As a consequence, analyzing a company’s fundamentals and methodically reviewing its financials to determine which stock an investor should buy becomes a full-time job.
In this scenario, TipRanks’ Smart Score System allows an investor to do a more in-depth examination of a company.
This Smart Score System is a data tool that integrates eight crucial metrics, such as fundamentals, technicals, hedge fund, investors and news sentiments, and insider trading activities. To help investors make better judgments, each stock is then graded on a scale of one to 10, with 10 being the best.
Using TipRanks’ Top Smart Score Stocks, we uncovered two stocks with a “Perfect 10” Smart Score. These stocks have a Strong Buy average rating, and a lot of potential for growth.
Monolithic Power Systems
To begin, we have Monolithic Power (MPWR), a semiconductor business that has been rated a “Perfect 10” since yesterday. The company’s products are used in a variety of digital and analog devices, including portable electronics, cloud computing, telecom infrastructure, wireless phones, medical equipment, and automobiles.
The company released its third-quarter 2021 earnings on October 28. It brought in $323.5 million at the top line, up 24.7% year-over-year and higher than the average expectation of $316.04 million.
Revenues were not the only thing that grew. Monolithic’s Q3 earnings per share came in at $2.06, up 21.9% from $1.69 a year ago and above Street forecasts of $2.00. The company’s robust results were fueled by strength in all of its end-user markets.
Rosenblatt’s Hans Mosesmann was impressed with Monolithic’s strong Q3 earnings. He writes: “MPS delivered another strong and clean beat and raise with all end-markets (excepting consumer) driving momentum for the business amidst supply chain shortages that could last into 2H22.”
Mosesmann reiterated a Buy rating on the stock and a price target of $620, which implies about 14.8% upside potential to current levels.
He lays out a series of solid reasons to take a bullish stance on Monolithic by stating, “We continue to believe Monolithic Power is at the center of a stronger power silicon cycle that is being driven by fundamental shifts in data center AI-centric architectures, 5G, and Automotive that are moving to more sophisticated, dense, and efficient power solutions that are MPS’ expertise.”
To top it, the analyst adds, “We see the company benefiting from market share gains, structurally lower costs of 300mm manufacturing, and programmability that allows scale that competitors may not be able to match.”
Monolithic Power has a Strong Buy consensus rating from Wall Street analysts, with 10 recent assessments, including six Buys and one Hold. The average MPWR price target of $597.17 implies around 10.1% upside potential.
Danaher
Danaher (DHR), a multinational 3D design software provider, is another “Perfect 10” stock. Danaher’s three business segments are Life Sciences, Diagnostics, and Environmental & Applied Solutions.
Danaher continued its winning earnings streak in the third quarter, exceeding Wall Street estimates on both the top and bottom lines. Revenues increased by 23% year-over-year to $7.2 billion, owing to strong divisional performances. Adjusted earnings of $2.39 per share increased by 39% from the year-ago quarter.
In addition, the corporation has been highly active in terms of acquisitions. Danaher has purchased a number of large and small businesses in recent years to expand its capabilities. Danaher purchased Aldevron in August of this year. The deal is expected to boost the company’s position in the field of genomic medicine.
After the business posted outstanding Q3 earnings, Argus analyst David Toung maintained a Buy rating on the stock with a $340 price target.
Toung believes the firm is ideally positioned to assist biopharma companies in the development of novel medications, including COVID-19 therapies and vaccines. He also anticipates Danaher’s recent acquisition of Aldevron to aid the company’s expansion into the “fast-growing” field of genomic medicine.
Danaher stock has a Strong Buy consensus rating on TipRanks, with eight Buys and one Hold. The average DHR price target of $351 implies 17.6% upside potential.
Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
