Goldman Sachs Says These 3 Stocks Are Ready To Go Higher
Current market conditions are pushing investors into stocks, and the result is record valuations. The S&P 500 has hit a new all-time high, and the NASDAQ, which peaked in February, remains within 3% of its record high and is making a comeback. While this is obviously good for investors’ portfolios, there is some concern that we may be facing a stock bubble. However, starting with Goldman Sachs, strategist Petter Openheimer believes those concerns are overblown. He recently led a comprehensive study of asset bubbles over the past three centuries and concluded that stocks, while high, are rightly so. He notes that interest rates are historically low, which keeps returns on other assets low and makes stocks the best option for strong returns. In addition, Openheimer notes that some high-profile equity sectors – he uses Big Tech as his example – are generating the profits needed to prop up equity values. “While today’s technology companies have become very large, they are also extremely profitable. They have seen about three times the average sales growth of the rest of the market, and about twice the average growth of net income in recent years … being big and seeing a strong appreciation in prices is not equivalent to being a bubble. I think because these have been very profitable parts of the market, ”Openheimer noted. With that in mind, Openheimer’s colleagues among Goldman equity analysts have been scouring the market, finding the stocks that are poised to see gains in the current environment. We have opened the TipRanks database to get the details on three of these Goldman picks. Let’s take a closer look. Oscar Health (OSCR) The first Goldman Sachs pick we will see is Oscar Health, a disruptive company in the health insurance industry. Oscar has a technology focus and provides a new kind of health insurance: Telemedicine, healthcare technology interfaces, and a transparent claims pricing system combine to make the notoriously opaque health insurance industry easier for patients to navigate. The company was founded in 2012 and now serves more than 520,000 customers in 18 states. In early March this year, Oscar held his IPO. The company offered more than 37 million shares at $ 39 each, $ 1 above the initial guidance of $ 36 to $ 38, and raised more than $ 1.4 billion. Investors will see for the first time under Oscar’s hood in the 1Q21 earnings release, which is scheduled for May 13. Covering Goldman Sachs shares, analyst Robert Jones believes that OSCR presents a compelling risk reward. “OSCR, in our opinion, represents an opportunity to buy into a differentiated offering that is leveraged on attractive secular issues in healthcare (increasing consumerization, proliferation of technology-enabled healthcare offerings, etc.) and capable of grow at an organic level above 40%. line rate. We also see significant upward optionality in currently emerging opportunities in small group and MA end markets, as well as monetization of the technology platform. While we appreciate competitive risks in IFP’s end market and multi-year profitability schedule, we believe these are properly accounted for at the current trading multiple, “Jones commented. To this end, Jones places a Buy rating on OSCR, to accompany his generally optimistic outlook. Its price target of $ 44 is up ~ 76% over the next 12 months. (To see Jones’s track record, click here) In his short time in the public markets, Oscar has received 6 analyst reviews, including 5 buys against a single hold, making the consensus opinion a strong buy. The shares are priced at $ 25.06 and the median target of $ 37.83 suggests room for 51% growth in 2021. (See OSCR’s share analysis on TipRanks) Zai Lab, Ltd. (ZLAB) Some biotech companies operate with a precision approach, developing specific treatments for specific conditions; Others take a shotgun approach, creating and testing a wide range of therapeutic agents against an equally wide range of conditions, from cancers to autoimmune diseases and infectious agents. China-based Zai Lab is clearly in the latter category. The company’s product portfolio includes no fewer than 21 agents under development as treatment for conditions ranging from ovarian and gastric cancers to glioblastomas and mesothelioma and autoimmune skin conditions such as psoriasis. Projects in process are at all stages, from preclinical research to phase 3 / pivotal clinical trials and treatment approval. Zai Lab’s main products are niraparib, Optune and ripretinib: under the trade name Zejula, niraparib has been approved in China since December 2019 as maintenance therapy for adults with ovarian and fallopian tube cancers. It was approved by the US FDA for similar use in April 2020. Optune is Zai Lab’s trade name for Tumor Treatment Fields (TTFields), a new treatment regimen that uses electric fields, tuned to frequencies. particular, to inhibit cell division that causes tumor growth. Optune has been approved for use and marketing in mainland China, Hong Kong, Japan, the US, the EU, and Switzerland. The treatment is used to attack glioblastoma tumors in the brain. Looking ahead, Zai Lab hopes that the recent Chinese approval of ripretinib (trade name Qinlock) as a treatment for gastrointestinal stromal tumors (GIST) will open up new opportunities to expand the patient base. Ripretinib is the company’s third product approved in China in 15 months. Zai Lab will submit regulatory filings to expand the use of TTFields to mesothelioma later this year. In his coverage of Zai Lab for Goldman, Ziyi Chen sees the company’s continued success with regulators as a major factor supporting the value of the shares. “We see the [Qinlock] approval as an additional validation of Zai Lab’s robust clinical development and regulatory communication capabilities (approval 8.4 months from acceptance of the NDA and 22 months from licensing), confirming one of our thesis points from our beginning…. Furthermore, we believe that Qinlock will be eligible for this year’s NRDL price negotiation (last year’s deadline August 17, 2020), although the company has not given official guidance, ”Chen wrote. Based on these comments, Chen rates ZLAB’s stock as a Buy and gives the stock a target price of $ 205. At current levels, his target implies a sharp one-year gain of 64%. (To view Chen’s track record, click here) With three reviews posted, all for Buy, the consensus rating of ZLAB Strong Buy is unanimous. The stock is selling at $ 129 and its average price target of $ 207.29, slightly more bullish than the Goldman Sachs target set by Chen, suggests ~ 61% growth this year. (See ZLAB’s stock analysis on TipRanks) Coupang (CPNG) When an online sales site hits the jackpot, saying, “It’s the next Amazon,” usually that’s all a stretch. But Coupang, to all appearances, is the real deal. The South Korean e-commerce company, founded in 2010, posted more than $ 5.9 billion in sales in 2019, doubled to $ 12 billion in 2020, and is on track to dominate Korea’s online retail market. South. Coupang sells a huge variety of products on its site, from home furnishings and kitchenware to childcare items, pet supplies, and automotive necessities, and that’s just a small selection of its categories. The company has a Rocket Delivery network, which guarantees same-day or next-day delivery on more than 5 million items in stock, and claims a 99.6% delivery rate in 24 hours. A major e-commerce player, publishing numbers like that, would be ready for an IPO, and Coupang went public on Wall Street last March. The company offered 130 million shares at $ 35 each and raised $ 4.55 billion. Among the bulls is Goldman Sachs analyst Eric Cha, who began hedging Coupang with a Buy rating and a $ 62 price target. Investors will pocket a ~ 35% profit in case the analyst’s thesis is developed. Supporting his position, Cha writes: “Coupang has disrupted Korea’s e-commerce market with its 1P-based service, dubbed ‘Rocket Delivery.’ The wide variety of low-priced 1P products delivered free of charge the next day (or within hours) to Coupang Wow members will be hard for competitors to match and appears to be driving the shared mind as well as GMV. We expect the company to continue to prioritize GMV’s growth by expanding into new service offerings (ie Fresh and Eats) as well as new categories. ” Not everyone is as excited about Coupang as Cha, as TipRanks analysis reveals that CPNG is a hold. In fact, out of 5 analysts surveyed in the last 3 months, Cha appears to be the only bull. Meanwhile, the 12-month average price target is $ 50.60, which is a ~ 9% increase from current levels. (See CPNG Stock Analysis on TipRanks) To find good ideas for trading stocks with attractive valuations, visit TipRanks Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock knowledge. Disclaimer: The opinions expressed in this article are solely those of prominent 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.