Goldman Sachs says these 3 stocks are ready to tear higher
Current market conditions are pushing investors into equities – and the result is record high valuations. The S&P 500 has reached a new record high, and NASDAQ, which peaked in February, remains within 3% of its record high and is on the rise again. While this is obviously good for investors’ portfolios, there is some concern that we may be looking at a stock bubble. Balancing from Goldman Sachs, however, strategist Petter Openheimer believes these concerns are exaggerated. He has recently led a comprehensive study of asset bubbles over the last three centuries ̵
1; and comes to the conclusion that stocks, even if they are high, are right. He notes that interest rates are historically low, which keeps returns on other assets down and makes equities the best option for strong returns. In addition, Openheimer notes that some high-profile equity sectors – he uses Big Tech as his example – bring in the profits needed to support equity values. “While technology companies today have become very large, they are also extremely profitable. They have seen about three times the average sales growth in the rest of the market and about double the average net income growth over the last few years …. being big and seeing strong price increase is not equivalent to being a bubble I think Because these have actually been very profitable parts of the market, ”Openheimer noted. With that in mind, Openheimer’s colleagues among Goldman’s stock analysts have searched the market and found the stocks that are ready to see gains in today’s environment. We have opened the TipRanks database to get details on three of these Goldman choices. Let’s take a closer look. Oscar Health (OSCR) The first Goldman Sachs choice we look at is Oscar Health, a disruptive company in the health insurance industry. Oscar has a technical focus and delivers a new type of health insurance: telemedicine, technological health interfaces and a transparent injury pricing system all combine to make the famous opaque health insurance industry easier for patients to navigate. The company was founded in 2012 and now serves over 520,000 customers in 18 states. In early March this year, Oscar held its IPO. The company offered over 37 million shares at $ 39 each, $ 1 over $ 36 to $ 38 initial guidance and raised over $ 1.4 billion. Investors get their first look under the Oscar cap in earnings release 1Q21, which is scheduled for May 13th. Analyst Robert Jones, who covers the stock for Goldman Sachs, believes OSCR presents a compelling risk reward. “In our opinion, OSCR represents an opportunity to buy into a differentiated offering that is leveraged for attractive secular themes in healthcare (increased consumerization, diffusion of technology-based healthcare offerings, etc.) and able to grow to a 40% + organic top We also see meaningful upward option currently new opportunities in end groups in smaller groups and MA as well as monetary earnings of technical platform.While appreciating competitive risks in the IFP end market and the company’s multi-year timeline for profitability, we believe these are correct accounted for in the current trading multiple, “Jones commented. To this end, Jones puts a Buy rating on OSCR to go along with his generally optimistic outlook. Its $ 44 price target implies an upward trend of ~ 76% over the next 12 months. (To view Jones’ track record, click here) In his short time in the public markets, Oscar has received 6 analyst reviews, including 5 Buys against a single Team, making the consensus view a strong buy. The stock is priced at $ 25.06 and the average target of $ 37.83 suggests room for 51% growth in 2021. (See OSCR stock analysis on TipRanks) Zai Lab, Ltd. (ZLAB) Some biotech companies operate with a precise approach and develop targeted treatments for specific conditions others take a shotgun approach and create and test a wide range of therapeutic agents against an equally wide range of conditions, from cancer to autoimmune diseases to infectious substances. Zai Lab, based in China, is clearly in the latter category. The company’s pipeline includes no fewer than 21 drugs under development in the treatment of conditions ranging from ovarian cancer and gastric to glioblastomas and mesothelioma to autoimmune skin diseases such as psoriasis. The pipeline projects are at all stages, from preclinical research to phase 3 / Pivotal clinical trials for approval for treatment. Zai Labs main products are niraparib, Optune and ripretinib: Under the trade name Zejula, niraparib has been approved in China since December 2019 as a maintenance treatment for adults with ovarian and fallopian tube cancer. 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 specific frequencies, to inhibit the cell division that causes tumor growth. Optune is approved for use and marketing in mainland China, Hong Kong, Japan, the United States, the European Union and Switzerland. The treatment is used to target glioblastoma tumors in the brain. Looking ahead, Zai Lab expects that the recent Chinese approval of ripretinib (trade name Qinlock) as a treatment for gastrointestinal stromal tumors (GIST) opens up new opportunities to expand the patient base. Ripretinib is the company’s third approved product in China in 15 months. Zai Lab will submit legislative applications to expand the use of TTFields for mesothelioma later in the year. In his coverage of Zai Lab for Goldman, Ziyi Chen sees the company’s continued success with regulators as a primary factor supporting the stock value. “Shows [Qinlock] approval as a further validation of Zai Lab’s robust clinical development and regulatory communication capability (approval 8.4 months from NDA approval and 22 months from in-licensing), confirming one of our specialty points from our initiation … In addition, we believe that Qinlock will be eligible for this year’s NRDL price negotiation (last year’s cutoff August 17, 2020), even though no official guidance has been provided by the company, ”Chen wrote. In line with these comments, Chen rates ZLAB shares as a buyout and gives the stock a price target of $ 205. At the current level, his target implies a robust upward 64% annual. (To see Chen’s track record, click here) With three reviews on record, all to buy, the strong buy’s consensus rating ZLAB is unanimous. The stock is selling for $ 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 stock analysis on TipRanks) Coupang (CPNG) When an online sales site hits big to say “This is the next Amazon”, it’s usually all hype. But Coupang is by all accounts the right deal. The South Korean e-commerce company, founded in 2010, showed over $ 5.9 billion in sales in 2019, doubled it to $ 12 billion by 2020 and is on track to dominate the South Korean online retail market. Coupang sells a huge selection of products on its website, from household appliances and kitchen utensils to childcare items to pet supplies and car needs – and it’s just a small selection of their categories. The company boasts a Rocket Delivery network that guarantees same-day or next-day delivery of more than 5 million items in stock and claims a delivery rate of 99.6% 24 hours a day. A major e-commerce player that sent numbers like that would be ripe for an IPO – and Coupang was announced on Wall Street in March last year. The company offered 130 million shares at $ 35 each, raising $ 455 billion. Among the bulls is Goldman Sachs analyst Eric Cha, who began covering Coupang with a Buy rating and a price target of $ 62. Investors stand on the pocket ~ 35% gain if the analyst’s dissertation plays out. Cha supports his position, writing: “Coupang has disrupted Korea’s e-commerce market with its 1P-based service, called ‘Rocket Delivery’. The large selection of cheap 1P products delivered free the next day (or within hours) to Coupang Wow members will be difficult for competitors to match and seem to run mind-share as well as GMV. We expect the company to continue to prioritize GMV growth by expanding into new service offerings (i.e., Fresh and Eats) as well as new categories. “Not everyone is as enthusiastic about Coupang as Cha, as TipRanks analyzes reveal CPNG as a team. In fact, Cha seems to be the only bull out of 5 analysts who have participated in the last 3 months. Meanwhile, the 12-month average price target is $ 50.60, meaning ~ 9% upward from current levels. (See CPNG stock analysis on TipRanks) To find great ideas for stocks trading at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making an investment.