We’ve seen heavy losses in leading stock indexes since early January. The S&P 500 has fallen 13% year-to-date, and the NASDAQ’s 24% drop has pushed that tech-heavy index into bear-market territory. But the past couple of weeks have driven home the lesson that market volatility is the true ruling factor in 2022.
Heading into the Memorial Day long holiday weekend, there was a sustained gain as stocks across the board posted gains and the indexes showed a full week of solid increases after 7 weeks of losses. Are the good times returning? Maybe, maybe not.
To ride out these unsettled market conditions, investors will need to find the right stocks, tickers with strength across multiple attributes. The TipRanks platform has pulled all the necessary data from the markets – but sorting it is another matter. That’s where the Smart Score comes in, using sophisticated data algorithms to sift and collate the raw mass of market datapoints for every stock on Wall Street.
It’s a mammoth undertaking that the Smart Score tool pulls off, rating thousands of stocks according to 8 separate factors, each linked to future performance, and distilling all of that down to a single score, a Smart Score, for each stock, on a scale from 1 to 10. It lets investors see at a glance where the stock is likely to head in the near future.
Now let’s put it into practice. We’ve looked up latest stats on 2 stocks that have earned ‘perfect 10’ scores from the Smart Score tool. We can take a deep dive in to find out just what sets these stocks apart, and we can look at the Wall Street commentary to find out what the professional analysts think we need to know. Here it is.
Tecnoglass, Inc. (TGLS)
First up on our list is Tecnoglass, an important fixture in the construction world. Tecnoglass is a world leader in the market for architectural glass, windows, and related aluminum products used in the construction industry. The company’s products find homes in the commercial, multi-family, and single-family structure end markets. Based in Barranquilla, Colombia, Tecnoglass is Latin Americas #1 architectural glass firm, and the #2 such company in the US market – where it finds some 90% of its revenues. Tecnoglass boasts a 3.5 million square foot, vertically-integrated, hi-tech production facility in its home country.
Tecnoglass produces numerous glass products for any number of uses in construction. Products include laminated safety glass, thermal insulated glass, and monolithic single sheets. The company also offers a range of specialty work in glass, including edgework, digital printing, silkscreening, and cut holds and notches.
The hot construction market of the past two years has been a major benefit to Tecnoglass. The company has seen both top line revenues and bottom line earnings grow consistently. The company has had 7 consecutive quarters of sequential revenue increases, and 5 such quarters for earnings. In the most recent reported period, 1Q22, Tecnoglass had revenues of $134.5 million, up 21% year-over-year to quarterly record for the company.
On earnings, Tecnoglass reported 53 cents per diluted share in 1Q22, a 51% gain y/y. The company’s overall gains were driven by a 155% y/y increase in single-family residential revenues, which make up 44% of the total revenue stream. Looking forward, Tecnoglass has a $651 million work backlog, another company record and up almost 18% from the year-ago quarter.
These strong results led the company to announced its Q2 dividend at 6.5 cents per common share, or 26 cents annualized per share. At this rate, the dividend yields a modest 1.1%; the key here is not the yield but the fact that the company has raised it from the pandemic-period 3-cent low and held it at the higher level for the past 3 declarations.
In coverage of this Latin American company for investment firm B. Riley, 5-star analyst Alex Rygiel says: “We believe TGLS is well positioned to continue to grow within the U.S. residential market and benefit from its geographic expansion plans, as well as the growing pipeline of commercial projects in the SE. As well, we believe the company’s low-cost manufacturing, vertically integrated platform, increased automation, and strong product offerings should help drive down costs, gain share, and grow even in a more uncertain market.”
Rygiel doesn’t stop with his upbeat commentary. He rates TGLS shares a Buy, with a $32 price target that implies a one-year upside potential of ~45%. (To watch Rygiel’s track record, click here)
While this stock has only 3 recent analyst reviews on file, they are all positive, for a unanimous Strong Buy consensus rating. The shares are selling for $22.12 and the $33.67 average price target indicates potential for 52% upside in the year ahead. (See TGLS stock analysis on TipRanks)
Ziff Davis, Inc. (ZD)
And now let’s check out a resident of the online world, a media and internet company with a wide portfolio of brands in cybersecurity, entertainment, health, marketing tech, and shopping. Ziff Davis is involved with all of that, and more. The company operates in its various segments through a network of owned brands, each of which can specialize in its own service. Ziff Davis is a mid-cap firm worth more than $3.72 billion at current stock valuations.
A look at some numbers will show the scale – and success – of Ziff Davis’ business. Between 2013 and 2022, the company has made 81 lasting acquisition moves, perfecting an expansion strategy that has turned the firm into a major digital player. ZD saw more than $1.6 billion in total revenues last year, which was up 12% from 2020.
In its Q1 release for this year, ZD reported $315 million in revenue, along with a non-GAAP diluted EPS of $1.23. These results came in slightly below expectations, with revenue missing by ~3% and EPS by ~5%. On a positive note, ZD finished the first quarter with $988.7 million in cash and other liquid assets, a major boon that supports the company’s share buyback program and its active merger and acquisition strategy. On the latter, ZD deployed some $30.8 million paying for current and prior acquisition activities.
Pursing M&A, Ziff Davis announced that it completed three moves during 1Q22. These included the acquisitions of Lifecycle Marketing, Map Genie, and BPHope, which now are folded into ZD’s family of brands. The company did not disclose the financial terms of the acquisitions.
All of this impressed Susquehanna’s 5-star analyst Shyam Patil, who came down to a bullish bottom line: “ZD remains laser-focused on value creation through a combo of organic growth + M&A + asset monetizations (as evidenced by the recent Consensus spin). With the recent market weakness, management sees an attractive M&A environment, and the company has plenty of dry powder as needed. We see the risk/reward as compelling with minimal downside risk and substantial upside potential.”
Patil also rates the stock as Positive (i.e. Buy), while setting a price target at $140 to suggest a 78% upside in the next 12 months. (To watch Pati’s track record, click here)
Once again, we’re looking at a stock with a unanimous Strong Buy consensus rating, based on 5 recent positive reviews. ZD shares have an average price target of $113, implying ~44% upside from the current share price of $78.63. (See ZD 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.