The stock market generates an immense volume of data, and the key to success lies in interpreting it accurately. This is no small feat, given the thousands of public stocks, tens of thousands of traders, and millions of daily transactions. Extracting valuable insights requires sifting through a vast amount of raw data.
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The Smart Score compares every stock to a set of factors with a proven history of predicting stock outperformance. Each stock is stacked up against these factors and then given a score, a simple score on a scale of 1 to 10. The highest rating, the ‘Perfect 10,’ indicates a stock that deserves a closer look.
We’ve opened up the TipRanks database to start giving some ‘Perfect 10’ stocks just that closer look. According to the data, these are shares that have Strong Buy ratings from the Street and offer sound upside potentials for the year ahead. Here are the details, with comments from the analysts.
Talos Energy (TALO)
The first ‘perfect 10’ stock we’ll look at is Talos Energy, a $2 billion player in the Gulf of Mexico hydrocarbon sector. Talos operates on the Gulf Coast and offshore in the Gulf, and is one of the region’s important independent energy production firms. Talos works to provide safe and reliable energy production, and in 2023 generated more than 66 thousand barrels of oil equivalent per day.
In the last reported quarter, for 1Q24, Talos showed that it is on an upward trajectory. The company realized a daily average quarterly production of 79.6 thousand barrels of oil equivalent, well above the 2023 full-year average. Talos’s production was composed of 71% oil, with the remainder being natural gas and natural gas liquids.
On the financial side, the company’s Q1 revenue came to $429.9 million, up more than 33% year-over-year, and beating the forecast by over $24 million. At the same time, the company saw a net EPS loss in the quarter, of 13 cents per share by non-GAAP measures, which exceeded the consensus estimate by one cent.
The key point here, for investors, is the increasing hydrocarbon production, which bodes well for the company moving forward. Goldman Sachs analyst Neil Mehta has run with that thesis, writing, “We believe TALO represents a unique opportunity for investors over the coming years, with improving leverage to the oil demand strength through this decade (2P reserve life of ~11 years), as an oily (~70% cut), scaling producer in the Gulf of Mexico.”
Getting into specifics, the 5-star analyst adds, “Our constructive investment thesis for the stock is as follows: (a) positive Gulf of Mexico outlook given the oily nature of the basin relative to the US market (~40% cut) and the low position on the US oil cost curve, even in comparison to the Permian; (b) larger and earlier life-cycle asset base (total worldwide pro-forma production of ~90 MBOE/d) following the recent QuarterNorth transaction, with oil-weighted assets (~70%) relative to the US oil market (~40%); and (c) long-term upside around potential future growth (organic/inorganic) opportunities and potential for the introduction of shareholder returns as cash generation improves (2026 expected leverage ratio of 0.5x at $80/bbl Brent relative to expected 2024 leverage ratio of 1.0x).”
Mehta’s bullish stance backs up his Buy rating on TALO stock, while his $14 price target implies a one-year upside of ~29%. (To watch Mehta’s track record, click here)
Overall, it’s clear that Wall Street agrees with the bulls on this one. The stock has a Strong Buy consensus rating, based on 6 unanimously positive recent share reviews. The average price target, of $20.42, indicates potential for a 91% upside from the current share price of $10.67. (See TALO stock analysis)
Haemonetics Corporation (HAE)
Next up on the ‘perfect 10’ list is a global healthcare company, Haemonetics. This company has staked out a role for itself in the blood donation and collection business. Haemonetics has developed and produced a suite of products for the blood business, including devices to improve blood and plasma component collection, surgical suite use of blood and blood products, and hospital transfusion services. These devices are available under one roof, so to speak, making Haemonetics the go-to place for blood donation centers and medical blood banks.
The market for blood products is large, and it is growing at a fast pace. It’s estimated at $38.16 billion this year, and expected to grow at a 4.54% CAGR over the next several years, to reach more than $54 billion by 2031.
An industry facing growth like that presents a solid opportunity for a company able to grab it, and that is what Haemonetics has done. The company’s revenues have been on an upward trend for the past several quarters, and in fiscal 4Q24, which ended on March 30 of this year, the company recorded a total of $343.3 million at the top line. This was up almost 13% year-over-year and was $13.8 million ahead of the estimates; it supported a non-GAAP earnings-per-share of 90 cents, a figure that beat the forecast by a penny.
Along with revenues and earnings, Haemonetics generated $64 million in quarterly cash from operations, and $59 million in free cash flow. For the full year fiscal 2024, these totals were $182 million and $127 million.
These results were based on Haemonetics’ solid position in all aspects of the blood industry. The company offers technologies and solutions for the collection, storage, and distribution of whole blood; of blood products, including plasma and other components; and blood cell processing. The company has effectively navigated a difficult industry, including headwinds in the form of competition from CSL, a global competitor.
Covering the stock for Needham, analyst Michael Matson believes HAE presents a compelling risk reward at current levels. He writes, “HAE shares are undervalued in our view, due to skepticism about its FY26 margin target and the consensus EPS estimate. We expect shares to see multiple expansion as HAE’s quarterly results prove it is on a path to meeting its FY26 target.”
Quantifying his outlook on HAE, Matson rates the stock as a Buy. His price target, at $112, implies that the shares will gain 24% on the 12-month horizon. (To watch Matson’s track record, click here)
All in all, this stock has 4 recent analyst reviews, and they all agree that it is one to buy – making the consensus a Strong Buy. The shares are priced at $89.85 and have an average target price of $114.75, suggesting a potential upside of a ~28% for the year ahead. (See Haemonetics stock forecast)
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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.
