Trading 3 “Strong Buy” Stocks at Rock-Bottom Price
Whether the market moves up or down, every investor likes bargaining. It is a thrill to find a valuable stock at a low, low price – and then see it appreciating over the mid-to-long run. That type of portfolio development is one of the reasons why we are all in the investment game to begin with. So, how are investors supposed to differentiate between names designed to get back on their feet and stay down in the dump? Analysts believe that the lawsuits on Wall Street are here. Using TipRank’s database, we have indicated three beaten-down stocks that analysts believe are gearing up for a rebound. Despite the heavy damage done so far in 2020, the three tickers have garnered enough praise from Street to achieve a “Strong Buy” consensus rating. Scorpio Tanker (STNG) We will start in the ocean-going tanker sector, a key component of the global trade network, transporting fuel that boosts the world’s economy. The industry faces systemic headwinds in the form of unavoidable high costs and low margins, and has been buffeted by low demand and less storage space during the coronovirus crisis. General difficulties facing the tanker segment have raised Scorpio’s share price by 72% this year. Scorpio is a small-cap fuel carrier, operating a fleet of 128 proprietary tankers supplemented by 10 other chartered vessels. The company’s ships include 21 Handicams and 59 MR tankers along with several LR1 and LR2 vessels. Scorpio’s fleet operates worldwide. The tanker industry has recently felt a heavy headwind, with Scorpio having managed to weather them. The company has the advantage of operating the smallest size tankers (Handimax) in the global fleet, giving it access to smaller ports and facilities than competitors dependent on larger ships. STNG’s 1H20 performance has outperformed its industry, and has shown sequential gains in both Q1 and Q2 for revenue and earnings. The second quarter top line came in at $ 346 million with $ 2.40. Acquiring this share for Deutsche Bank, analyst Amit Mehrotra writes, “STNG’s financial position should be given new liquidity – with an expected $ 82M in the coming weeks / months, mostly from sales and leaseback transactions. … Burning of cash is an important consideration when assessing risk, and in this case STNG is comfortably positioned in our view. From a stock perspective, while we are optimistic about stocks in terms of current rates and relative risk profiles Understand the performance… we see more than enough liquidity lever outside of new equity… ”With his opinion about the liquidity position of STNG, Mehrotra rates buy shares one. Their $ 27 price target is a strong upside of 153% for the coming year. (To see Mehrotra’s track record, click here) Overall, Strong Buy Analyst’s consensus rating is unanimous, based on 4 recently purchased reviews. The Scorpio tanker is currently trading at $ 10.69, and its $ 28.75 average price target suggests a one-year upside of 168%. (See STNG Stock Analysis at TipRank) International Sewage (INSW) Next on our list is another small-cap tanker firm, International Sewage. The company operates a fleet of 39 ships, including Swagemax and Panamax ships – the largest that can cross its eponymous canals – with giant VLCC tankers weighing up to 250,000 tonnes. The company’s fleet also includes small MR and LR1 tankers. INSW is able to leverage its various fleets to generate positive revenue and earnings, even in the difficult environment imposed by the coronovirus epidemic. The top line rose from $ 125 million to $ 139 million in the last two quarters, and EPS increased from $ 1.49 to $ 2.39. Despite generally positive revenue and earnings, INSW shares have lost value. The stock peaked for the year in early January, but has since fallen by 48%. B. Liam Burke of Riley FBR, notes that INSW has seen 100% year-over-year gains equal to the charter charter, a positive marker of being able to take advantage of the company’s temporary oil storage requirement. . On demand for both crude and refined petroleum product floating storage, the company continued to strengthen in 2Q20 after 1Q20. For the first half of 2020, the strong spot rate drove healthy generation net cash out of operating activities of $ 127.7 million, compared to $ 43.8 million a year earlier. In a very volatile space market, we believe that INSW’s opportunistic periodic run of vessels and operating a diverse fleet enables the company to capture value in both crude oil and refined products, “Burke opined .Burke has set a $ 35 price target on international sewage. Shares, indicating potential for impressive growth – up 131% over the next year. This outlook supports his buy rating. (To see Burke’s track record, here Click) Overall, INSW recently has 4 reviews, including 3 Bues and 1 Hold, making its analyst consensus view a strong buy. The average price target of $ 30.25 shows that the stock has 99% upside potential from the stock price of $ 15.15. (See INSW Stock Analysis at TipRank) FirstCash, Inc. (FCFS) The last stock on our list is a unique trading location in the world of pawn shops. FirstCash with 24 US states -America and Lati with presence in Mexico, Guatemala, El Salvador and Colombia Neither operates a chain of pawn shops in the US. The company provides financial services to customers with severe cash and credit constraints, using personal property pledges to secure consumer property loans. The general decline in consumer activity – and solid government push benefits to provide expanded unemployment assistance and special ‘one-time’ incentives – put a damper on FirstCash’s business in 1H20. The effect was particularly noticeable coming from a higher 4Q19. FCFS typically sees more commercial traffic in the fourth quarter, which covers the holiday season. The difference between a strong Q4 and the difficult ‘Corona Half’ was marked. In 1H20, FirstCash saw revenue declines of $ 466 million in Q1 and $ 412 million in Q2. The EPS drop was stable; Earnings slipped 35% from 96 cents in Q1 to Q1. The company’s shares are declining, as well. The market boom in late February inaugurated a period of high volatility for FCFS, which has left the stock for 26% of the year. Alonso Garcia of Credit Suisse described the current valuation as “attractive”, and says. “The defensive nature of FCFS’s business model should come into play in the quarters and deliver a gradual but consistent income reimbursement in 4Q20, as consumption patterns should normalize economies again and as claw demand arises once in the US. The effects of strong fiscal stimulus have been overtaken and the effects of the deteriorated macro backdrop post-pedic kick. “Garcia gives FCFS an outperform (ie buy) rating, a 25% upside FCFR, with a $ 74 price target. Capacity. (To see Gracia’s track record, click here) All in all, FirstCash has a strong Buy Analyst consensus based on 3 bice and 1 hold. Shares of this company are selling for $ 59.11, and an average price target of $ 79.38 indicates room for 34% upside growth over the next 12 months. (See FCFS Stock Analysis at Tipfrank) To find good ideas for stock trading at attractive valuations, buy Tiprank’s Best Stocks, a newly launched tool that unifies all of Tiprank’s equity equities. Disclaimer: The opinions expressed in this article are solely those of select analysts. Content is to be used for informational purposes only. It is very important to do your own analysis before making any investment.