Smart investing involves taking the long view. As Warren Buffett has famously said, “If you’re not willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” The best way to realize gains in the stock market: get in, and stay in. Patience is a virtue, and compound interest is your friend.
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That said, the issues become how to find the right stock for the long-term portfolio. The information you need is all out there – but there’s a lot of it, and it’s easy to get intimidated by the flood of data.
That’s where the TipRanks’ Smart Score comes in. The Smart Score is a data-sorting tool, that collates the collected information in the TipRanks database, information on the performance of more than 9,000 publicly traded stocks, and assesses it according to 8 factors known to be predictive for share appreciation. The result is a score, a single-digit rating indicating the general direction a stock is likely to move in the year ahead.
The Smart Scale runs from 1 to 10, with 10 being a perfect score. These ‘perfect 10s,’ with their status derived directly from the objective data, make a good starting point for investors seeking the right long-term stock plays.
We’ve gone ahead and gotten the search started, using TipRanks’ Top Smart Score Stocks tool, and we’ve found two equities that can boast of a ‘Perfect 10’ from the Smart Score. Adding another attractions, both also claim ‘Strong Buy’ ratings from the Street’s analyst consensus – and with share prices under $5, they won’t break the bank. Here are their details.
ViewRay, Inc. (VRAY)
First up is ViewRay, a medical tech company that’s blazing a novel approach to the treatment of cancer. ViewRay uses MRI technology to deliver anti-cancer radiation treatments with greater accuracy. Their result: a lower radiation dose needed to attack the cancer, and benefits to the patient from both the treatment and the lower dose.
ViewRay’s flagship product is the MRIdian system, an industry-first radiation therapy system that integrates diagnostic-level MRI with an advanced linear accelerator to deliver the radiation dose with extraordinary precision. The necessary accuracy is achieved with MR-guided, real-time, 3D, multiplanar soft tissue tracking and automated beam control. In plainer words, the system operator uses the MRI to look inside the patient and guide the radiation beam to the exact point it is needed.
For investors, the key is a steady long-term gain in revenues, as the product proves itself and gains market penetration. In the recently reported 3Q22, the company showed $26.5 million at the top line, up 38% year-over-year. While the company reported a net loss of similar magnitude, at $26.1 million, the financial release included several additional positive metrics. ViewRay picked up eight new order for MRIdian during the quarter, for a total of $47.5 million, and the company’s total backlog increased y/y from $295.1 million to $370.5 million.
In his coverage of ViewRay, B. Riley analyst Neil Chatterji charts a clear path forward, saying, “VRAY has exhibited strong growth in backlog and new orders. Install activity has picked up and become more consistent after historically being impacted by some delays in hospital construction projects. While supply challenges have been a factor, VRAY has navigated this well…”
“We expect VRAY’s installs to start to accelerate as the macro environment continues to improve. We believe positive momentum for orders, installs, and margin enhancement, along with positive clinical results and capabilities enhancing demand, should remain key drivers with an almost 40% top-line CAGR (’21-’24E),” Chatterji added.
These are not the comments of an analyst who has any doubts, and Chatterji gives VRAY a Buy rating, with a $17 price target that suggests an upside of 67% in the next 12 months. (To watch Chatterji’s track record, click here)
Overall, VRAY has picked up reviews from 6 of Wall Street’s analysts, with a 5 to 1 breakdown favoring Buys over Holds giving the stock a Strong Buy consensus rating. The shares have a current trading price of $4.78 and an average price target of $6.83, suggesting an upside of ~43% on the one-year horizon. (See VRAY stock analysis on TipRanks)
Geron Corporation (GERN)
The second company we’ll look at, Geron, is a biopharma conducting late-stage human clinical trials on its flagship drug candidate imetelstat, a potential first-in-class telomerase inhibitor for the treatment of myeloid hematologic malignancies. These are severe cancers of the blood and bone marrow, and include various forms of leukemia. Imetelstat has shown promise in at suppressing or preventing the progenitor cell clone formation and proliferation that characterizes these diseases.
Geron has advanced imetelstat to Phase 3 trials on two tracks. The IMerge study is testing the drug in the treatment of low risk myelodysplastic syndrome (LR-MDS). It is a randomized, double-blind, placebo-controlled study with 170 patients enrolled, and top-line results are expected in 1Q23, possibly as early as January. The IMpactMF study has also reached Phase 3; the company opened the remaining testing sites for the study, and the drug is being evaluated as a treatment for relapsed/refractory myelofibrosis, or MF. The interim analysis of this study is expected later next year.
These are the two leading research tracks. Geron has several additional studies of imetelstat ongoing, at various stages from preclinical to Phase 1 and 2 clinical trials. The company has $195 million in cash and liquid assets available to fund operations, and received a modest revenue stream, based on royalties from the sale of cell-based research products from previously divested assets.
Wedbush analyst Robert Driscoll is upbeat on Geron, based on positive prospects for the clinical trial program going forward.
“We believe clinical data generated to date shows meaningful efficacy in both LR-MDS and MF, consistent with biomarker data showing a reduction in malignant clones and imetelstat’s unique mechanism of action. We anticipate positive top-line data from the ongoing Ph 3 study in LR-MDS in early 2023, allowing for approval and initial launch in 1H:2024 in a large commercial market. Furthermore, interim data expected in 2024 from an ongoing Ph 3 study in r/r MF could potentially lead to an additional value inflection,” Driscoll opined.
Putting some numbers where his mouth is, Driscoll gives GERN shares a price target of $5, suggesting a 117% upside in the next 12 months, and supporting his Outperform (i.e. Buy) rating. (To watch Driscoll’s track record, click here)
Overall, the consensus rating on GERN, a Strong Buy, is unanimous, based on 4 recent positive reviews from Wall Street’s stock analysts. The shares are selling for $2.30, and the average target of $4.75 implies a one-year gain of 106%. (See GERN stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
