The most perplexing aspect of selecting stocks for investment is conducting in-depth research from a large pool of data. The different TipRanks tools do the job easily and provide great relief to investors.
One such tool is the TipRanks Smart Score tool, which assigns a score to every stock based on eight different factors. The stocks with higher scores between eight and ten have more chances to surpass the market. With this data-driven score, investors can easily assess the capability of the stock.
Australian companies Santos Limited (AU:STO) and Aristocrat Leisure Limited (AU:ALL) score a “Perfect 10” on this tool and have a high potential to beat the market’s returns.
Let’s have a closer look at them.
Santos Limited is a global energy company engaged in the production of natural gas and oil in Asia and Australia.
Santos’ stock has substantially rebounded after a rocky period following the pandemic, with a 21% gain over the past year. The ups and downs were driven by the fluctuations in oil prices and the concerns over the recession.
The company has time and again proved its capability with its solid back-to-back performance in the results. In its third-quarter results for 2022, Santos delivered a big 85% jump in YTD revenues of $5.9 billion. The cash flows were equally impressive, with 194% growth at $2.7 billion. This was due to the company’s efforts to deliver good production numbers, as well as rising commodity prices.
Recently, the company announced an annual return of 40% of free cash flow to better reward its shareholders. This will include both dividends and share buybacks. The company also announced additional returns from any divestments from the portfolio.
Is Santos a Good Stock to Buy?
According to TipRanks’ analyst consensus, Santos Limited stock has a Strong Buy rating, with a complete majority of 11 Buy recommendations.
The STO average price target is AU$9.1, which is 28.5% higher than the current price level. The price has a high forecast of AU$10 and a low forecast of AU$8.05.
Aristocrat Leisure Limited
Aristocrat Leisure is a technology company that develops mobile and casino games, serving millions of players worldwide. The company also manufactures gaming machines and has operations in 20 locations around the world.
The company’s stock soared during the COVID-19 pandemic as the demand for its games increased during the lockdowns. However, the stock lost that momentum and has fallen by around 30% YTD.
Last month, the company reported its full-year results for 2022. Contrary to the stock prices, the numbers depicted a different story of strong revenue and profit growth. The operating revenue for the year stood at AU$5.5 billion, up by 17.7% from 2021. Net profit after tax grew by 30% to AU$1 billion, supported by a remarkable performance in North America.
The company’s continued investments in its product portfolio and increased focus on diversification work well and are visible in the results. Its gaming segment outperformed and offset the slower growth in pixel united, which is likely to continue in 2023.
Aristocrat Share Price Forecast
According to TipRanks’ rating consensus, Aristocrat stock has a Strong Buy rating, based on eight Buy and one Hold recommendations.
The ALL target price is AU$40.96, which represents a growth of 32% on the current price level.
Both Santos and Aristocrat have proven their dominance in their respective sectors.
These ASX stocks with a high Smart Score give investors the confidence to trust these companies for another year of stable growth in 2023. The market, on the other hand, should reward the strong fundamentals of these companies over a long-term period.