Although the S&P 500 gave up a portion of the steady gains earned over the past three months, it is still up YTD. Has the minor sell-off created any buying opportunities?
Below is a list of April Buy recommendations made by analysts who had no other bullish recommendations over the past 3 months.
For your directory assistance, we’ve classified the opportunities by sector.
Healthcare
SELLAS Life Sciences Group (SLS) – Stephen Read, who manages the hedge fund HIT Capital, says its leading drug candidate has a 44% probability of success with a large addressable market and a potential 6x return. – Sellas Life Sciences Group: A Lottery Ticket With An Estimated 6x Payout
Achieve Life Sciences (ACHV) – Dalrymple Finance, who provides deep fundamental research to hedge funds and other institutional investors, says the stock is at an inflection point as clinical trials for its smoking cessation drug have produced excellent results, the path to the NDA filing is clear, and it is financed to completion and the analyst believes a buy-out in 2025 is a likely event. – Achieve Life Sciences: An Excellent Drug Addressing A Large Market Could Drive 5x Returns
Medical Properties Trust (MPW) – Jussi Askola, CFA, who is President of Leonberg Capital, a value-oriented investment boutique, says that although MPW is very speculative, there is recent good news that increases the probability of significant returns, including progress at Steward Health, asset sales and a dividend announcement. – Very Good News For Medical Properties Trust
Financials
Silvercrest Asset Management (SAMG) – Value investor Value Digger highlights the low valuation, positive outlook, steady increase in assets under management, fortress balance sheet and rich dividend. – Silvercrest: Dividend, Fortress Balance Sheet, Low Valuation, Positive Outlook
A-Mark Precious Metals (AMRK) – The Insiders Forum, who specializes in small caps, says that while it is a low-margin business, it is a steady and profitable one, trading at just over 6.5x FY25E EPS, yielding ~2% and repurchasing shares while the precious metals market may benefit from any macro uncertainty. – A-Mark Precious Metals: A Good Name For Gold Bugs
Hannon Armstrong Sustainable Infrastructure Capital (HASI) – Long-term investor Nathanael Kisler says that although HASI has been hit hard by interest rate hikes, the dividend is secure and growing while it has a strong balance sheet and resilient operations. – Hannon Armstrong: Dividend Creates Massive Value
Shift4 Payments (FOUR) – UFD Capital, the general partner and investment manager of the UFD Capital Value Fund, says the selloff is a buying opportunity given the strong top and bottom-line growth and long-term investors can acquire shares at an attractive valuation. – Shift4 Payments: The Sell-Off Appears Overdone
Mastercard (MA) – The Dividend Bro, who focuses on dividend investing, sees as much as a 20% return, driven by continued strong growth, high margins and a strong moat, as it has one of the largest electronic payment networks in the world. – Why Mastercard Could Be 20% Undervalued
Communications
Iridium Communications (IRDM) – Long/Short investor Kevin George says the valuation based on forward estimates is much lower given the strong growth while potential catalysts include improving free cash flow, deleveraging and the growth opportunity in mobile devices. – Iridium Communications Is A Momentum Buy On Forward Growth Potential
Warner Bros. Discovery (WBD) – Value investor Rasoli research says WBD trades at a dirt cheap valuation, it produces substantial amounts of free cash flow and there is a plan to pay down debt. – Warner Bros. Discovery: Massive Free Cash Flow Is Overlooked
Warner Bros. Discovery (WBD) – Value investor Gerritjan Boeve also highlights the opportunity in WBD, noting positive factors including stronger advertising spending, Max is likely to be in the top 3 streaming services globally and leadership that is executing well with significant skin in the game. – Warner Bros. Discovery: An Undervalued Media Giant That Could Dominate Streaming
Netflix (NFLX) – Growth investor Christopher Canno says Netflix is positioned to dominate the streaming market and highlights the low churn, high retention rates, rapid user growth, and industry-leading average revenue per user. – Decoding Netflix’s Market Dominance (Rating Upgrade)
Technology
Zenvia (ZENV) – Long/Short investor Kinix Research highlights the clear mispricing and says it recently refinanced debt and renegotiated earn-out liabilities on much better terms (resolving funding gap issues) and is returning to high profitable growth while it remains undervalued compared to peers. – Zenvia: The Brazilian Underdog
SoundThinking (SSTI) – Cobiaman, a 25 year veteran of the small-cap technology hedge fund sector, says SSTI is a cheap SaaS company at 2x sales and the strong growth and operating leverage can lead to 40% EBITDA margins. – SoundThinking: Niche SaaS Company With Huge Operating Leverage To 40% EBITDA Margins
Daqo New Energy (DQ) – Value investor Second Level Thinking says DQ trades at a significant discount to NAV and highlights the operating leverage in the polysilicon price, potentially adding further upside. – Daqo New Energy: An Opportunity To Buy The Company For Cents On The Dollar (Editor’s note: shares have fallen since the article was published)
PagerDuty (PD) – Value investor High Watermark Investments says the durable growth and margin (helped by a differentiated position in real-time operations management and growing demand) suggest it deserves a higher valuation multiple. – PagerDuty: Valuation Looks Reasonable
Apple (AAPL) – Dividend Appreciator, who focuses on dividend investing, says Apple’s history shows that periods of lower growth are good opportunities to buy the stock and that investors can expect double-digit annual returns while highlighting the strong history of dividend growth. – Apple Should Climb The Wall Of Worry
Consumer Staples
Archer-Daniels-Midland (ADM) – Value investor DJTF Investments says issues with decreased profitability are due to short-term factors, which creates an attractive opportunity for a long-term investor to buy a good company on sale as ADM is a fundamentally strong business with a healthy balance sheet. – Archer-Daniels-Midland: Short-Term Profitability Issues Create Long-Term Opportunity
Ambev (ABEV) – Growth investor Fernando Batista Costa says Ambev is a wide-moat company with strong profitability and a solid balance sheet and that the valuation is attractive assuming no significant deterioration of the Brazilian real. – Ambev: A Currency That Produces Beer
Consumer Discretionary
Build-A-Bear Workshop (BBW) – Long/Short investor Douglas McKenny highlights the rising profitability, growing returns on invested capital, and compounding free cash flows at a high rate, which makes it an attractive investment option. – Build Your Portfolio With Build-A-Bear Workshop
Fu Shou Yuan International (OTCPK:FSHUF) – Value investor Compounding Dollar Bills says that it trades at ~13x trailing earnings while profits grew over 20%, it has a fortress balance sheet with high margins, and there are strong growth prospects. – Fu Shou Yuan: Replicating The Service Corp Playbook In China
Churchill Downs (CHDN) – Growth investor Undercover Alpha says CHDN is undervalued with best in class operating margins (and ROE/ROC) and consistent revenue and net income growth. – Churchill Downs: Making A Wager On This Proven Compounder
O’Reilly Automotive (ORLY) – Growth investor Nikolaos Sismanis says ORLY seems well-positioned to sustain its outstanding sales growth, improving unit economics, and aggressive buyback track record. – Forget EVs: Compound Your Returns With O’Reilly Automotive
Industrials
Shoals Technologies (SHLS) – Investing Done Right, who focuses on small and microcap stocks with growth potential, says this is a proxy investment for the solar/EV industry (and both of those markets are expected to have strong growth) while SHLS has strong top-line growth and a solid balance sheet. – Shoals Technologies: High-Growth Undervalued Stock Benefitting From High-Growth Markets
Fluence Energy (FLNC) – Innovation Sustainability Growth, who focuses on innovative companies, says it is undervalued and firing on all cylinders while the battery electric storage systems market growth is still in the early stages where Fluence is a leading player. – Fluence Energy: A Strong Buy After The Drop
Materials
BHP Group (BHP) – Longtime analyst WYCO Researcher says BHP is a buy for those seeking a reasonable total return over the next few years, helped by the relatively high dividend yield. – BHP Group Should Be Added By Investors Seeking Income And An Attractive Total Return
Energy
Occidental Petroleum (OXY) – Stefan Lingmerth, who has 20 years of institutional experience in research and portfolio management, says the valuation is low, the cash flow yield is high, there has been a substantial reduction in debt, and it is situated well in an environment with oil around $80/barrel. – Fueling Growth: Occidental Petroleum’s Journey Towards Energy Sector Leadership
ETFs
Energy Select Sector SPDR Fund ETF (XLE) – Kirk Spano, who has managed money since the 1990s, says XLE is a way to hedge a rise in the price of oil, which could rise due to many factors, including conflicts in the Middle East and OPEC’s influence on oil production. – XLE: 2 Oil Trades To Hedge A Broader Middle East War And Politics
Inclusion Criteria: The above ideas were objectively compiled based on the set criteria. Exclusions include new Seeking Alpha analysts, broad market calls, crypto ideas, leveraged ETFs, and stocks that were repeat recommendations by the analyst.
Thanks for reading.
This account (SA Rare Stock Picks Monthly) will publish future iterations of this report in the upcoming months. If you missed our Rare Stock Picks from March, you can find it here.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
