Author: Craig Adeyanju
Estimated read time: 4 minutes
Publication date: 3rd Jan 2020 21:04 GMT+1
The key to winning in the stock market is pretty straightforward own a portfolio of winning stocks. The tricky part is identifying stocks that will win, as there’s no crystal ball that helps in this regard. You’ll have to do your research to make your prediction of stock with the potential to win. However, it might be helpful to piggyback on the research of analysts, who have already done their due diligence and forecast that certain stocks have significant upside potentials. We used our stock screener to sort stocks with the highest upside potential based on analysts’ target prices. So if you’re looking for list of stocks to consider in 2020, here are some that analysts love.
Note: historical price references were as of close of market on Dec. 27.
Market Cap: $24.02 billion
YTD Performance: 11.49%
American pharmaceutical company Alexion Pharmaceutical Inc. (NASDAQ: ALXN) presently has a strong buy consensus rating from 18 analysts. With that comes a target price of $150.5 per share, representing nearly 40% in upside potentials.
The most interesting aspect to ALXN is its present growth mode. It’s grown its revenue by about 1,120% over the last the last 10 years, with a 398% net income growth achieved over the same period. Alexion is also free cash flow positive, growing by 589.2% in the past year alone. Its FCF is currently $1.47 billion. The company is estimated to earn $10.37 per share in 2020.
Alexion is the maker of the blockbuster drug Soliris, used in the treatment of blood disorder paroxysmal nocturnal hemoglobinuria (PNH).
Market Cap: $927.04 billion
YTD Performance: 24.29
With a price target of $2,182.83 per share, e-commerce giant Amazon.com Inc. (NASDAQ: AMZN) has a 16.74% upside potential in the near term. AMZN stock currently has 30 analysts consensually rating it a strong buy.
Despite the upside potential, which admittedly isn’t all that spectacular, you should consider have the stock in 2020 for two reasons. First is the growth potential that the company holds. With online retail sales accounting for only 11.2% of U.S. retail sales, there’s still more room to grow its e-commerce business, especially being the distant leader in the space.
Second is the stock’s somewhat recession-proof nature. Despite the S&P 500 gaining nearly 30% in 2019, the predictions of an impending recession was overwhelming throughout the year. That’s partly because the current bull run has lasted a decade, the longest in recent memories. This puts some caution to every analysis, because a recession is one of the constants of life. Geopolitical tensions (think US-China trade wars Brexit) also dominated the year, which experts believe is a precursor for a recession. These perditions are likely to intensify in 2020 and it may be the year that the predictions actually meet reality.
Amazon is historically a stock that weathers the recession respectably.
As the chart above shows that AMZN stock lost only about 9.69% during the 2008 recession, while the S&P 500 was down 37.39%. And that was at a time when e-commerce sales were just 3.6% of the total retail sale in the U.S.
Market Cap: $593.45 billion
YTD Performance: 58.75%
Social network giant Facebook Inc. (NASDAQ: FB) has been one of the best discoveries for investors since it went public in 2012. Investor who entered FB stock around the IPO price have seen up to 444.3% gain.
FB stock has a consensus strong buy rating from 30 analyst, with a price target of $236.23. That gives the stock an upside potential of 13.52%. The stock isn’t exactly cheap or undervalued, especially considering its PE of 32.40 versus that of a competitor such as Alphabet Inc. (NASDAQ: GOOGL), which has a PE of 29.10. However, the stability that comes with a company of Facebook size will be good to have in a portfolio
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
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