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Raymond James: these 3 stocks are set to rise by more than 80%
We are just over a week after the presidential election and the market reaction shows that investors are happy. While the electoral margins were thin as a razor, the will of the voters came out: they rejected Donald Trump and his brash and blunt style, but they also rejected the Democratic Party on politics; Democrats have lost seats in the House, probably won’t take control of the Senate, and they’ve also lost ground at the state level. American voters seem to be tired of the drama, whether it comes from Donald Trump or the Democrats’ push to the political left. They want a government that simply trudges and it looks like it will achieve just that. With the division of power in the White House and the Houses of Congress, we are about to recall a characteristic of the system of checks and balances: that impasse is the result of a strictly divided electorate. Change will not happen unless one side or the other gets a large majority or a small majority over multiple mandates. None of these are in the cards for now. The immediate result is a multi-day market rally. The implication is clear: Market sentiment has calmed down after the election and investors are looking forward to the government settling into a more normal mode in the coming months. To this end, investors will certainly find solid short-term options. Writing about Raymond James, analyst Ric Prentiss recently published three reviews on mid-cap stocks, pointing out why, in his view, they offer high return potential with more stabilized markets in the coming year. The stocks all fit into one profile: they are at the lower end of the mid cap range, with market valuations ranging from $ 2 billion to $ 3 billion; they inhabit the telecommunications ecosystem and, according to Raymond James, all have upside potential in excess of 80%. We analyzed the three through the TipRanks database to see what other Wall Street analysts have to say about them.Telephone and Data Systems (TDS) First on our list, Telephone & Data Systems, is a Chicago-based company which provides a range of telecommunications services to over 6 million customers. The company offers fixed and cable broadband, wireless products and services, and TV and voice services. TDS operates the country’s fifth largest mobile operator and has significantly exceeded expectations in 2020 despite the ongoing coronavirus. Revenues, at $ 1.32 billion, are roughly on the same level as the pre-crown ratio ($ 1.34 billion in Q4 2019), while earnings have increased in Q1 2020 and since then remained high. Earnings for the third quarter, at 66 cents, beat the forecast by 153%. It was an impressive performance, made even stronger by the 266% year-over-year growth. Another positive note for investors, TDS has maintained dividend payments throughout the year. The 17 cent per ordinary share payment annualizes to 68 cents and offers a yield of 3.6%, nearly double the average return found among publicly traded companies. TDS showed great deals during the year, but its weak point was fiber and yarn niche. However, Raymond James’s Ric Prentiss observes the glass as half full, noting: “WFH’s policies have continued to lead to some slower approvals from municipalities and power companies associated with building aerial fibers. And in some cases, TDS. is pivoting on better economy alternatives. However, TDS Telecom has increased its fiber service by 5% y / y and is seeing better-than-expected withdrawal rates at around 30-40%, depending on the market. 34% of Wireline customers are now served by fiber, up from 29% a year ago, and TDS expects an acceleration for the remainder of 2020. “Prentiss rates TDS as a strong buy and has raised its price target by 6. % to $ 34. At that level, he sees an 81% rise for the stock in the coming months. (To see Prentiss track record, click here) This stock also holds a strong buy rating by analyst consensus, based on 3 unanimous buy reviews established in recent weeks. The shares are priced at $ 18.73 and the average target of $ 34.83 suggests a one-year upside of 85.5%. (See TDS Stock Analysis on TipRanks) ViaSat, Inc. (VSAT) The next step, ViaSat, is a high-speed satellite broadband provider. The Californian company serves the commercial and defense markets, building on the broad need, across all sectors, for secure communications. The social lockdown measures impacted the company’s operations, particularly the closure of airlines. Commercial air traffic relies heavily on satellite communications and that slowdown still weighs on ViaSat. Headwinds are partially offset by a backlog of ordered services. Revenues have remained stable over the past four quarters, between $ 530 million and $ 588 million, with the $ 554 million recorded in the third quarter firmly in the middle of that range. Earnings returned to positive territory after turning negative in the second quarter. Third quarter EPS was just 3 cents, but it was a major sequential improvement over the previous net loss of 20 cents. In his look at VSAT, Prentiss notes, “Government systems and commercial networks remain strong, while the IFC business continues to navigate significant headwinds related to COVID-19 … On the bright side, social distancing and Safer- At-Home are driving greater use of broadband residential data and pushing ARPUs higher … “Prentiss rates VSAT as an Outperform (ie Buy) while its price target of $ 63 suggests upside potential. 87%. Overall, ViaSat achieves an analyst consensus moderate buy rating, based on 3 reviews including 2 purchases and 1 suspension. The shares have an average price target of $ 53.33, which implies a 12-month rise of 59% from the trading price of $ 33.39. (See VSAT Stock Analysis on TipRanks) EchoStar Corporation (SATS) Last but not least is EchoStar, another satellite operator. This company controls a constellation of communications satellites, offering satcom capabilities to media and private businesses as well as both civilian and military US government agencies. Additionally, EchoStar provides satellite broadband to 100 countries around the world. On top of the top line, EchoStar’s revenues have remained stable over the past three quarters, coming in at $ 465 million, $ 459 million and $ 473 million. And while earnings were negative in the first and second quarters, the third quarter results showed net earnings of 26 cents per share. . The company also boasts a solid balance sheet, with over $ 2.5 billion in cash on hand and no net debt. Regarding SATS, Ric Prentiss is optimistic about the short and medium term prospects. He writes: “SATS [has] strategic optionality at a time when others, especially the highly leveraged satellite companies, are cash strapped in the face of significant maturities or investment programs … we believe that numerous organic and inorganic growth options have been considered , including future SB and spectrum implementation after aligning the tenant (S). Finally, we believe EchoStar’s recently announced collaboration with Inmarsat to provide in-flight connectivity capabilities should deliver high margin cash flows over time, and we note the deal is not exclusive. ”These comments confirm another Strong assessment. Buy and Prentiss’ $ 57 target price indicates room for 123% growth next year. In terms of other analyst activity, it has been relatively quiet. The 1 Buy and 1 Hold ratings awarded over the past three months add up to the analyst consensus “Moderate Buy”. In addition, the $ 43.50 average price target places the upside potential at ~ 74%. (See SATS Stock Analysis on TipRanks) To find good ideas for trading stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buys, a newly launched tool that combines all of TipRanks’ equity insights. those of the analysts in attendance. Content must be used only or for information purposes. It is very important to do your own analysis before making any investments.
