For retail investors, seeking solid clues to the probable movements of the equity markets, the great volume of published analysis from the Wall Street experts is a blessing, making available everything the investor needs to know to trade successfully. But it comes with a price. The sheer quantity of data involved is almost impossible for the non-expert to parse, but how to know which of the 7,700 stock pros is the best to listen to?
A look at the Top Wall Street Analysts ratings from TipRanks can clear that air. The list shows the 100 best analysts from the Street’s investment and banking firms, and ranks them by such factors as their overall success rate and the average return their calls have generated in the past year. These are carefully chosen measures, as they directly indicate the analyst’s success in reviewing stocks.
And by those measures, one Wall Street pro stands taller than the rest. Quinn Bolton, from Needham, holds the #1 ranking among his peers, based on the 82% accuracy of his stock ratings, and the 54% average return those calls brought for investors who followed them. We’ve used the data tools at TipRanks to look up the details on two of Bolton’s picks, to find out what the Street’s best analyst looks for when he goes bullish on a stock.
We’ll start with a tech company. Advanced Energy designs, develops, and markets the tech hardware that makes everyone else’s products work. The company has an extensive line of plasma power generators, high voltage power supplies and amplifiers, low voltage power supply units, temperature measurement devices, electrostatic measurement instruments, and gas sensors, all vital components for a variety of applications in data centers, manufacturing, semiconductor production, and telecom.
The value of this niche can be seen in the company’s recent annual revenues – which prior to this year’s supply chain bottlenecks were consistently rising. The top line for fiscal 2019 was $718.9 million; in fiscal 2020, that rose to $1.45 billion. For the first three quarters of 2021, however, the company’s revenue is at $1.06 billion, and on track to come in just under last year’s total.
Looking at the recent 3Q21 report, we find that the top line of $346 million was down both sequentially and year-over-year (by 4% and 11% respectively) – although it did beat the midline of the company’s own previous guidance. EPS was reported at 89 cents, also above the guidance midline – but down 46% yoy.
The sliding revenues and earnings, and the supply chain/production problems behind them, spooked investors this year, and AEIS shares are down in the past 12 months. The stock has been highly volatile over the course of 2021, but the downward trend was clear; it has lost 28% since its January peak.
Bolton, for his part, remains bullish on the stock. He writes, “Due to constraints of certain semiconductor components, AEIS revenue disappointed expectations in 2021 and the company’s shares underperformed…. As we look into 2022, we believe better component availability will enable AEIS to begin to catch up on pent-up demand for its power conversion systems (backlog has nearly tripled since 4Q20). As revenue recovers, we see strong GM and OM leverage driving NG EPS to $6.00 or more on an annualized basis by year-end 2022 with annualized earnings power growing further to $7.00+ in 2023. As investors gain confidence in this earnings power, we believe AEIS is likely to outperform peers.”
In light of this position, Bolton upgrades his stance on the shares to from Neutral to Buy, and he sets a $120 price target which indicates room for 37% price appreciation in the year to come.
Not everyone on Wall Street is as upbeat on Advanced Energy as the Needham analyst; the stock has 7 reviews, which include 4 to Buy and 3 to Hold, supporting a Moderate Buy consensus. The shares are selling for $89.05 and their $106.29 average price target indicates an upside of 19% for next year. (See AEIS stock analysis at TipRanks)
How do you define a vital industry? We can’t get by without automobiles in today’s world, so they’re essential. But cars won’t go without semiconductor chips installed in their onboard computer and sensor systems, making the chips essential to the vehicle industry. And the chips won’t hit the market without an array of specialized manufacturing tools and tech that makes it possible to produce the silicon wafers. This deeper level of essential industry is where ACM Research exists. The company is a developer of wet processing technology, a crucial stage in all semiconductor manufacturing. Without ACM’s proprietary technology and advanced tools, it would be impossible even to create a pure silicon wafer to start the chip process.
Looking at the company’s latest quarterly statement, we see that the Q3 report put the top line at just over $67 million, up 40% yoy and the highest level in over two years. On earnings, adjusted EPS came in at 56 cents, up from 42 cents in the year-ago quarter. Gross margins in the quarter rose from 42% to 44% yoy.
In an important recent development, the company announced at the start of December that it had received orders for a preliminary shipment of tools and wafer cleaning technology for a major US-based semiconductor manufacturer. The first order to this customer (name not disclosed) is set for 1Q22, as an evaluation order to confirm ACM’s suitability for the user. Production tools for a high-end manufacturing line are scheduled for 2Q22. The move marks a major shift of ACM’s emphasis toward the US market.
This is another stock that has struggled in the market this year. The share price has been highly volatile and after peaking near $140 in February has tilted into the red.
Nevertheless, Needham’s Bolton believes the stock’s current valuation represents an opportunity and he sees the company’s performance and future contracts as the key points. He writes, “…we believe the current share price does not fairly reflect growth expectations for the company. We believe the narrative is shifting from a single segment (wet clean) China play among WFE stocks toward a multi-product, global expansion story within the group.”
He goes on to note that ACM’s shipments to new customers are an excellent leading indicator of future revenue, and then elaborates on the company’s incipient shift away from its China business: “During 4Q21 alone, the company has announced design wins with four global IC manufacturers including one in the U.S. Management’s strategy is to introduce the company’s tools (ex: ECP, SAPS, Ultra C pr wet strip, and furnace) at these manufacturers’ Asia-based facilities with acceptance of the eval tools leading to additional production orders at other facilities outside the region.”
Bolton’s comments support his Buy rating on the stock – an upgrade from a previous Neutral. He sets a price target of $100, suggesting a one-year upside potential of 29%. (To watch Bolton’s track record, click here)
While there are only 3 recent reviews of this stock on record, they are all in agreement – and bullish, making for a unanimous Strong Buy analyst consensus rating. The shares are currently trading for $77.62, and the $119 price target is even higher than Bolton’s, and implies a 53% upside in the next 12 months. (See ACM stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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.
shares tumbled 38% in Wednesday’s after-hours trading, after the remote healthcare provider reported deeper-than-expected losses for the first quarter and cut its financial projections for the year. The stock already had slid 70% over the past 12 months as the company struggled to shake off concerns that it’s just a pandemic play.
(ticker: TDOC) posted a loss of $6.67 billion, or $41.58 a share. Analysts polled by FactSet had been expecting a loss of just 60 cents a share, on average. In the same quarter last year, the telemedicine company lost $199.6 million, or $1.31 per share.
The loss in the first quarter was mainly driven by a noncash goodwill impairment charge of $6.6 billion, which is often recorded on the income statement after a company acknowledges that an asset has lost value or become completely worthless.
In Wednesday’s news release, Teladoc didn’t disclose many details about the goodwill impairment charge, but a large part of goodwill on its books came from its $18.5 billion acquisition of Livongo in 2020, according to the company’s filings with the Securities and Exchange Commission. Livongo is a digital health-management and coaching platform for people with chronic conditions like diabetes.
The goodwill impairment was triggered by the sustained decline in Teladoc’s share price, which is driven by the increased discount rate of the company’s future cash flows and decreasing valuations for peers in the high-growth digital healthcare space, said Chief Financial Officer Mala Murthy during a conference call Wednesday afternoon.
(ONEM), two of Teladoc’s major competitors in the telemedicine space, have seen their shares lose 80% and 83%, respectively, over the past 12 months.
Teladoc revenue increased 25% from the year-ago quarter to reach $565.4 million. The firm demonstrated “significant progress” in a number of strategic initiatives, said Teladoc CEO Jason Gorevic in a statement. Still, the number came in slightly lower than the $568.7 million estimates from Wall Street analysts.
For the fiscal year, Teladoc now expects to see revenue between $2.4 billion and $2.5 billion, and earnings before interest, taxes, depreciation and amortization, or Ebitda, ranging from negative $7 million to negative $52 million. The company has previously projected $2.55 billion to $2.65 billion in revenue and $18 million to $48 million in Ebitda.
“We are revising our 2022 outlook to reflect dynamics we are currently experiencing in the direct-to-consumer mental health and chronic condition markets,” says Gorevic, noting that higher advertising costs in some channels have dragged on the yield of its marketing spending. The firm is also seeing an “elongated sales cycle” in the chronic-condition market, he says, as employers and health plans evaluate their long-term strategies.
Following the disappointing earnings report, Teladoc shares, which had already fallen 3.1% during Wednesday’s trading to $55.99, slid further after hours to reach $34.50. If the losses are retained at Thursday’s market open, it will be the lowest level for the stock since March 2018 and cause significant losses for some of its largest shareholders.
TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.
Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.
Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.
The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.
A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.
A lawyer told Reuters her detained clients have been in Canada for years.
In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.
The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.
Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.
The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.
FEW NO-SHOWS AS DETENTIONS DROPPED
Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.
The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.
No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.
Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.
“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.
He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.
Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.
“Their position is that COVID is not a factor that should weigh in favor of release,” she said.
“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”
The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.
Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.
Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.
The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.
Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.
“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”
The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.
In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.
Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.