Why stocks are rallying while President Trump battles COVID-19
Why stocks are rallying while President Trump battles COVID-19
A Clear-Cut Biden Win Is Emerging as a Bull Case for Stocks (Bloomberg) — With Joe Biden’s lead widening in the polls and President Donald Trump’s campaign sidelined by the virus, investment strategists now say there’s less of a chance for a contested election.A clear-cut Democrat victory could avoid a long and messy legal battle and provide certainty to markets that have been nervous about election risks, according to strategists from Citigroup Inc. to JPMorgan Chase & Co.The S&P 500 was up about 1% as of 9:32 a.m. in New York, havens including bonds are seeing little demand and the greenback is down.“Polls are shifting from a close election and prolonged uncertainty to more a dominant Biden and clean succession,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA. “That is reducing uncertainty and increasing risk appetite.”JPMorgan Says a Biden Victory Could Mark a Shift in Stock MarketCross-asset traders are taking the newsflow in their stride, despite confusion over the president’s condition and more positive tests from Republican leaders.A poll released Sunday — taken between Tuesday’s debate and Friday’s news of the president’s infection — found that Biden’s national lead had leaped to 14 points, from 8 before the debate. Biden also has set two records for monthly fundraising in August and September, giving him enough money to dominate Trump on the airwaves.“Markets seem have lowered the chance of prolonged uncertainty post-November 3,” Barclays Plc strategists Ajay Rajadhyaksha and Shawn Golhar wrote in a note Sunday. “Given that Vice President Biden has been ahead in most polls, this suggests that markets are assigning a bit more probability to his win and a bit less to a close and contested outcome.”Barclays strategists point to a currency pair like the Aussie dollar versus the yen, a proxy for risk appetite. Its one-month implied volatility dropped to the lowest in weeks after the presidential debate. It has since rebounded, but remains below its 200-day average.The bank’s dollar-neutral Biden currency basket has also risen in recent days, a sign of rising confidence in the former vice-president’s prospects.The race is still closer in some of the states most needed to win the presidency. The unprecedented number of mail-in ballots being cast this year because of the pandemic means it likely won’t be possible in some battleground states to declare an unofficial winner on election night. Election officials say it could take days or even weeks in some cases to get a complete count, and a final determination could also be delayed by post-election lawsuits challenging the results.Still, volatility markets have been pricing in risks from the election for months now, raising the bar for bad news to hit trading.When it comes to futures tied to the Chicago Board Options Exchange Volatility Index, contracts for the coming three months are all trading above the one expiring in January, signaling investors are expecting wilder equity swings around the election.But a weekend of confusion over Trump’s state of health has not deepened such anxieties. October’s contracts, which cover the polling date, are down 2% on Monday after jumping nearly 5% on Friday.On the betting market PredictIt, the chance of a Biden win stands at 64%, a tiny drop from a peak of 66% the day before Trump’s positive test was announced. A long-short strategy betting on Biden’s triumph compiled by Nomura Holdings Inc. and Wolfe Research has hardly moved since reaching a record high on Thursday.Treasuries fell on Monday, with yields on long-maturity bonds rising more than those at the short end. The difference between five- and 30-year rates increased to almost 124 basis points, the widest in more than a month, as investors pared holdings of havens.That confidence, combined with a continued economic recovery, will help support equity markets — and potentially even a rotation into riskier shares, according to Evercore ISI.“Passage of fiscal package 4 plus a Democratic sweep would be a significant support for value and cyclicals near term,” strategists led by Dennis Debusschere wrote in a note Sunday.If Trump’s condition deteriorates, investors might start to wonder if the election could be postponed or who would run for the presidency in his place. Yet judging from financial markets’ reaction so far, that remains far from traders’ radar.“Our baseline – of a risk-supportive macro outlook despite election uncertainty – will not change unless the president’s health unexpectedly takes a worse turn,” the Barclays strategists wrote.At the same time, there is still no shortage of debate over whether Democratic or Republican policies would be better for investors. While some pundits say the former would raise taxes and tighten regulations in a blow to corporate profits, others point out a Democratic sweep could boost government and consumer spending to add a fresh leg to the risk cycle.All told, between the disruption wrought by the pandemic and a volatile sitting president, a humdrum transfer of power is seen as providing investor solace.“We do have sympathy with the idea that a clean election outcome is likely a positive event from here given the “chaos” risk overhanging markets,” strategists at Jefferies wrote in a note.(Updates market moves throughout, adds quote in fourth and additional election context)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. Bloomberg Billionaire’s Tool Firm Taps Loans for Fifth Payout in a Decade (Bloomberg) — Companies have been selling risky loans to fund payouts at the fastest pace in years. Harbor Freight Tools USA Inc., a discount tools retailer run by billionaire Eric Smidt, is the latest borrower looking to line its pockets.The company, which sells $7.99 wrenches and $8.99 plier sets, is seeking to borrow $3 billion in what will be its fifth such deal in the past decade, according to data compiled by Bloomberg.It plans to use some of the proceeds to refinance existing debt and the rest for a dividend, according to a person familiar with the matter. Credit Suisse Group AG, which is leading the seven-year deal, kicked off marketing on Monday and the offering may price as soon as Oct. 14, said the person, asking not to be identified discussing a private matter.Representatives for the Camarillo, California-based company didn’t immediately respond to a request for comment. A representative for Credit Suisse declined to comment.So-called dividend recapitalizations have soared in recent weeks amid low borrowing costs fueled in part by liquidity-boosting policies by the Federal Reserve and rising demand from yield-starved investors that have little else to buy. About $12.6 billion of loans funding payouts to shareholders were launched in September, the most for any month in about six years, data compiled by Bloomberg show.Read more: Private equity using loans for payouts at fastest pace in yearsSmidt, Harbor Freight’s chairman and chief executive officer, has been steadily raising debt against the closely held company since 2005, with dividend deals issued in 2010, 2012, 2013 and 2016, according to Bloomberg-compiled data. Smidt’s net worth is $5.1 billion, according to the Bloomberg Billionaires Index.Harbor Freight is offering investors a spread of 3.25 to 3.5 percentage points above the London interbank offered rate for the loan, according to the person. Like other recent deals of its kind, the debt is rated in the top tier of junk debt at Ba3 by Moody’s Investors Service, or three levels below investment grade.Its business has also fared relatively well during the pandemic, with stores deemed as essential and the vast majority of its premises remaining open with modified hours during the outbreak, according to Moody’s. The dividend deal will add about $850 million of additional debt to the company’s balance sheet but it could deleverage quickly, according to Moody’s.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. Investor’s Business Daily The stock market rebounded after President Trump said he’d leave the hospital tonight. Nvidia leads 5 chip stocks in buy zones. TheStreet.com New Retirement Law Makes Big Changes to How You Save Retirement planning is about to change in ways not seen since the Pension Protection Act of 2006. The long-awaited Securing Every Community for Retirement Enhancement (SECURE) Act has been passed by Congress and was signed into law by President Trump as part of a $1.4 trillion spending bill. Fox Business President Trump vowed to continue lowering taxes if he defeats Democratic challenger Joe Biden on Nov. 3. Barrons.com Barron’s took the S&P 500 Dividend Aristocrats and sifted through them to find companies with strong balance sheets, free-cash-flow growth between 2017 and 2019, and a free-cash-flow yield of more than 1%. TipRanks Buy These 3 Dividend Stocks on Weakness, Say Analysts The conventional wisdom would say that a stock with low share value and falling revenues and earnings would not be a great buying proposition. But the conventional wisdom also said that nothing would replace the horse in transportation, and that Hillary Clinton would be President. Sometimes, it pays to look under the hood, and see what’s really driving events – or stock potentials.And that is what several Wall Street analysts have done. In three recent reports, these analysts have highlighted stocks that all show the same combination of features: A Strong Buy consensus view, a high upside potential, a high dividend yield – and a strongly depressed share price. The analysts point to that share price weakness as an opportunity for investors.We ran the tickers through TipRanks database to find out what made these stocks compelling.ConocoPhillips (COP)First on the list is ConocoPhillips, the world’s largest oil and gas production company, with over $35 billion in annual revenues, $7 billion in annual income, and a market cap exceeding $36 billion. ConocoPhillips is based in Houston, Texas, and has operation in 17 countries. Just under half of the company’s 2019 production came from the US.With all of that strength behind it, COP shares are down 46% year-to-date. The key is low oil prices, which are depressing earnings. In the second quarter, the company recorded a net loss per share of 92 cents. The loss comes on the heels of declines prices; COP’s crude oil realized an average price of $25.10 per barrel, down 61% year-over-year, and natural gas liquids brought in $9.88 per barrel equivalent, a 54% yoy decline. Top line revenues fell 55% to $2.75 billion.Despite the falling revenues and earnings, COP has kept up its dividend payment. The company raised the payment from 31 cents to 42 cents last autumn, and the recent quarterly payment, sent out in early September, marked four quarters in a row at that level – and 5 years of dividend reliability. At $1.68 per common share annually, the dividend yields 5.08%.JPMorgan analyst Phil Gresh notes ConocoPhillips’ solid balance sheet and free cash flow, and points out the company’s logical path forward.“COP announced its intention to buy back $1B of stock with cash on hand, which we think is an acknowledgement that management views the stock as being over-sold, even considering the commodity price environment. We tend to agree with this view… COP continues to have plenty of cash and short-term investments on hand to be opportunistic with its capital allocation,” Gresh opined.Accordingly, Gresh rates COP an Overweight (i.e. Buy), and his $49 price target implies an upside of 44%. (To watch Gresh’s track record, click here)Overall, the Strong Buy consensus rating on COP shares is based on 13 reviews, including 11 Buys and 2 Holds. The stock sells for $33.90 and has an average price target of $48.08, in line with Gresh’s. (See COP stock analysis on TipRanks)Baker Hughes Company (BKR)Next up is Baker Hughes, an oil field support services company. These are the companies that supply the tech needed to make oil well work. The exploration companies own the rights and bring in the heavy equipment, but it’s the support service providers who send in the roughneck drillers and the tools that complete the wells and keep them in operation. Baker Hughes offers technical services to all segments of the oil industry, upstream, midstream, and downstream.Providing an essential set of services and products has not protected Baker Hughes from the prevailing low oil prices. BKR shares have underperformed, and are down 48% year-to-date. The company’s earnings and revenue fell sequentially in both Q1 and Q2, with second quarter EPS turning negative at a 5-cent loss per share. Revenue fell 12% to $4.7 billion for the quarter.Like COP above, Baker Hughes has made a point of maintaining its dividend. The company’s dividend has been reliable for the past 21 year – an enviable record – and management has prioritized that reputation. The payment, of 18 cents per common share quarterly, annualizes to 72 cents and gives a robust yield of 5.6%.Writing from RBC, analyst Kurt Hallead sees Baker Hughes at the start of a new path forward.“BKR’s strategy is to shed its oil services skin and transition into a global Energy Technology company. As many industries aggressively pursue carbon reduction targets and increase spend on renewable energy, BKR’s plan is to lever its technology portfolio and position its core businesses for new frontiers, notably carbon capture, hydrogen and energy storage,” Hallead noted. “In our opinion, pivoting to Energy Technology from Oil Services will be key to maintaining relevancy with investors, ensuring long-term viability with customers and outperforming its peers. BKR’s strong balance sheet and FCF generation provide a firm foundation. BKR is the only Energy Technology Services company on both the RBC Global ESG Best Ideas list and the RBC Global Energy Best Ideas list,” Hallead concluded.Hallead is optimistic about the company’s ability to effect this transition, as shown by his $20 price target, suggesting an upside of 55%. (To watch Hallead’s track record, click here)Overall, Wall Street agrees with Hallead on BKR. Of 12 reviews, 9 are Buys and 3 are Holds, making the consensus rating a Strong Buy. The average price target is $20.27, implying an upside of 58% from the trading price of $12.86. (See BKR stock analysis on TipRanks)Enerplus (ERF)Last on our list is Enerplus, another exploration and production company in North America’s oil and gas market. Enerplus operates in the Marcellus shale of Pennsylvania, producing natural gas, in the Williston Basin of North Dakota and Montana, producing light oil, and in several oil assets in Western Canada. The company estimates 2020 average production of 89,000 barrels of oil equivalent per day. And with all that to back it up, this small-cap ($419 million) energy player has seen its stock fall 73% this year.A 45% drop in top-line revenue, and earnings falling to a net loss of 14 cents per share in Q2, haven’t helped, but the real culprit, as with the companies above, is the current low oil price regime. The COVID-19 pandemic hit energy producers from several directions at once: reduced demand as economic activity declined, disruptions to production as workers were placed under stay-home orders, and disruptions to trade networks for both of those reasons.And yet, through all of this, Enerplus has consistently paid out its monthly dividend. The payment is small – only 1 cent in Canadian currency, or slightly less than 1 cent in US money – but the stock’s share price is low, as well. As a result, the 9 cent (US) annualized dividend payment gives a fairly robust yield of 4.8%.Analyst Greg Pardy, of RBC, watches the North American oil industry – especially the Canadian segments – carefully, and he believes Enerplus sits in a strong position to weather a tough market. “Enerplus remains our favorite intermediate producer given its consistent operational performance and best-in-class balance sheet… Liquidity wise, Enerplus is in excellent shape… [and] essentially undrawn on its US$600 million bank credit facility. Following repayments in May and June, Enerplus has no further debt maturities in 2020,” the analyst cheered. In line with this optimistic assessment, Pardy gives ERF a C$5.00 (US$3.76) price target indicating an upside of 100% for the coming year. (To watch Pardy’s track record, click here)All in all, with an 8:1 split between Buy and Hold, Enerplus’ 9 recent reviews support the Strong Buy analyst consensus. The share price is $1.85, and the US$3.72 average price target suggests it has room for 97% growth in the year ahead. (See ERF stock analysis on TipRanks)To find good ideas for dividend 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. MarketWatch AT&T’s 7% dividend yield makes stock a ‘value trap,’ analyst says in downgrade AT&T Inc. shares are off 0.5% in premarket trading Monday after KeyBanc Capital Markets analyst Brandon Nispel downgraded the stock to underweight from sector weight. He sees signs of “deterioration” for AT&T’s DirecTV business during August and also sees indications that the company’s wireless postpaid average revenue per user has been falling on a month-over-month basis. Nispel previously expected DirecTV’s subscriber losses to improve but now projects that they will be worse in the third quarter. “More broadly, we see [AT&T] as secularly and competitively challenged where 2020/2021 expectations high across most segments,” he wrote in a note to clients. Nispel argued that there are “few positive catalysts for [AT&T] outside of asset sales” and that the company’s roughly 7% dividend yield “makes AT&T a value trap.” AT&T shares have declined 27% so far this year as the S&P 500 has added 3.6%. Investor’s Business Daily Graphics-chip maker Nvidia on Monday made a slew of announcements related to its work in artificial intelligence and data centers. The announcements drove Nvidia stock sharply higher. FX Empire As the next 6-month low in gold approaches, I wanted to share some thoughts on where I believe the bull market in gold is headed. Any dip from here is considered a long-term buying opportunity. Investor’s Business Daily China Tesla rival Xpeng Motors delivered 8,578 electric vehicles in Q3, up 266% vs. a year earlier. Xpeng stock, a recent IPO, jumped. TheStreet.com Gilead Sciences is starting the week off with a solid gain. Can bulls take control and drive shares higher? MarketWatch Not all 401(k) investors are as optimistic about their accounts as President Trump President Trump — on Twitter — listed some reasons why Americans should vote for him on Monday morning; one being their 401(k) plans. The president often touts how well the economy is doing under his administration, including a stock market recovery in the six months following a pandemic-fueled economic shutdown and sharp market decline. During the presidential debate against Democratic nominee Joe Biden last week, Trump said when the stock market does well, jobs and 401(k) balances benefit. Bloomberg U.S. Takes Stake in Battery-Metals Firm to Wean Itself Off China (Bloomberg) — The U.S. government has taken an equity stake in a battery-metals company in a move that undercuts dependence on China for a key material used in electric vehicles.TechMet Ltd. received a $25 million investment from the U.S. International Development Finance Corporation to help develop a Brazilian nickel and cobalt mine, the Dublin-based company said Monday in a statement. Cobalt is an important ingredient in cathodes of most electric-vehicle batteries and its refining capacity is largely under China’s control.“Investments in critical materials for advanced technology support development and advance U.S. foreign policy,” Adam Boehler, chief executive officer of the government agency, said in TechMet’s statement.The move is another example of U.S. efforts to reduce reliance on its greatest geopolitical rival for key materials and comes days after President Donald Trump signed an executive order to expand domestic production of rare-earth minerals — another sector China dominates. Such minerals are needed for magnets in a broad range of products including electric vehicles.TechMet’s main investments include lithium-ion battery recycling plants in Canada and the U.S., a Rwandan tin and tungsten mine and a U.S. vanadium facility. Most metals targeted by the company fall under China’s influence at some stage of the global supply chain — a fact TechMet CEO Brian Menell is keen to highlight.“TechMet represents a real opportunity for its investors not only to profit from the impending supply-demand dislocation for critical metals, but also to invest into ethical sources of supply that are aligned with U.S. interests, thereby playing a part in redressing the supply-chain imbalance,” he said in the statement.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. TipRanks 3 “Strong Buy” Healthcare Stocks With Major Catalysts Approaching It can happen in a New York minute. We are talking about the massive gains certain healthcare stocks are able to notch in what feels like a split second. Unlike names from other areas of the market, earnings results don’t paint the full picture. Rather, other factors like clinical trial data or regulatory decisions can be more useful in determining if a particular company is on the path to life-sustaining revenues. Therefore, any positive update can be the catalyst that sends shares blasting off towards outer space.These plays, however, aren’t without their risk. A disappointing outcome could also be the spark that ignites the flame, only launching shares in the opposite direction. This is what makes compelling healthcare stocks so difficult to spot, but the analysts can help.Using TipRanks’ database, we found three healthcare stocks getting love from the Street ahead of major possible catalysts. Each name has amassed enough bullish calls to earn a “Strong Buy” consensus rating. Hefty upside potential is also on the table here.Kala Pharmaceuticals (KALA)Developing treatments for inflammatory ocular conditions, Kala Pharmaceuticals wants to improve the lives of patients everywhere. With the October 30 PDUFA date for its EYSUVIS product fast-approaching, several analysts think that now is the time to get on board.EYSUVIS is a corticosteroid designed for the short-term treatment of signs and symptoms of dry eye disease (DED). DED is a multifactorial disease of the tears and ocular surface of the eye that causes discomfort, visual disturbances and tear film instability, which is usually accompanied by hyperosmolarity (higher concentration of salt than water in tears) and inflammation. Affecting about 16.4 million adults in the U.S., the condition has a major impact on a patient’s quality of life, and in some cases, can lead to declines in work productivity.Wedbush analyst Liana Moussatos is optimistic about the therapy’s prospects, noting that approval could come before the PDUFA date. To this end, a U.S. launch is forecasted for early 2021, with KALA set to be launch ready in Q4 2020, and the analyst believes blockbuster revenue ($1 billion) could be in store.Citing presentations from Key Opinion Leaders (KOLs), Moussatos highlights the broad market opportunity for the asset given the current unmet need and its potential position as the first approved corticosteroid in this indication.Additionally, based on clinical data, unlike already approved drugs RESTASIS, CEQUA and XIIDRA, the therapy generated a rapid onset of action, with it also overcoming well-known adverse events associated with ketosteroids such as increases in intraocular pressure (IOP).Moussatos mentioned, “Dr. Holland made specific reference in his remarks to both EYSUVIS’ rapid onset of action as well as its favorable safety profile with respect to IOP elevation as reason for his choice to use it as first-line therapy for a high percentage of his patients if approved.”Summing it all up, the analyst stated, “Given the inadequate control of dry eye flares on current standard-of-care treatments and the unwillingness of eye care professionals (except cornea specialists) to use corticosteroids off-label, we feel EYSUVIS is uniquely positioned to immediately address an underserved portion of the market using corticosteroids off-label as a short-term therapy for rapid relief while gradually addressing chronic users of immunomodulatory agents such as cyclosporine (RESTASIS, CEQUA) and lifitegrast (XIIDRA) on maintenance therapy.”To this end, Moussatos rates KALA an Outperform (i.e. Buy) along with a $39 price target. This puts the upside potential at a massive 430%. (To watch Moussatos’ track record, click here)In general, other analysts echo Moussatos’ sentiment. 4 Buys and 1 Hold add up to a Strong Buy consensus rating. With an average price target of $20.80, the upside potential comes in at 173%. (See KALA stock analysis on TipRanks)Revance Therapeutics (RVNC)Focused on innovative aesthetic and therapeutic offerings, Revance Therapeutics works to address the unmet needs of patients. As multiple catalysts are on the horizon, Wall Street is pounding the table.Investors are eagerly awaiting the FDA decision regarding RVNC’s novel botulinum toxin (BoNT) product, daxibotulinumtoxinA for Injection (DAXI), in glabellar (frown) lines. The PDUFA date is scheduled for November 25.Ahead of the decision, Guggenheim’s Seamus Fernandez has high hopes. “Given the positive SAKURA results, our approval expectations are high,” the 5-star analyst commented.That being said, Fernandez argues “DAXI’s potential in the therapeutic market is underappreciated, particularly for the upcoming ASPEN-1 results in cervical dystonia (CD),” which is a movement disorder that results in abnormal posture or twisting of the neck. This indication marks DAXI’s foray into the world of therapeutics, with the pivotal ASPEN-1 top-line data readout set to come by or before late-November. When it comes to DAXI in the CD indication, the asset’s long-acting profile makes it a stand-out compared to available BoNTs, which are short-acting. In a Phase 2 trial, DAXI demonstrated a duration of effect greater than 20-24 weeks at all doses, versus that of marketed BoNT toxins (12 weeks on average; ranges 12-18 weeks depending on the formulation or dose).“Payers have limited BoNT access to an every-12-week (Q12W) dosing schedule for CD. However, based on expert discussions, 20-25% of de novo CD patients complain of pain recurring prior to the next injection, and thus do not find relief from the existing insurance-mandated Q12W dosing schedule. DAXI could be an alternative BoNT for these patients. Moreover, DAXI had demonstrated a peak treatment effect of 50% in its earlier Phase 2 trial, which, in our view, is best-in-class,” Fernandez explained. To this end, substantial upside could be in the cards if RVNC reports positive data.If that wasn’t enough, the release of top-line results from its Phase 2 trial in plantar fasciitis (PF), a common cause of heel pain, is slated for the same timeframe. Roughly 2 million patients with the condition seek treatment annually, but the standard-of-care usually includes NSAIDs, orthotics, physical therapy, rest, weight loss or corticosteroids, with physicians trying to avoid excessive use of steroids.However, BoNTs, used off-label by some specialists due to success in small studies, have yet to succeed in a randomized Phase 2 or Phase 3 study. “Given the opportunity to differentiate itself from the existing BoNT therapeutic market, RVNC is conducting a second larger Phase 2 trial with 155 patients,” Fernandez noted. While his models don’t include PF, favorable results could be a game changer.Taking all of this into consideration, Fernandez maintains a Buy rating and $41 price target. This target conveys his confidence in RVNC’s ability to climb 65% higher in the next year. (To watch Fernandez’s track record, click here)Are other analysts in agreement? They are. Only Buy ratings, 5 to be exact, have been issued in the last three months. Therefore, the message is clear: RVNC is a Strong Buy. Given the $34.20 average price target, shares could surge 38% in the next year. (See RVNC stock analysis on TipRanks)Rhythm Pharmaceuticals (RYTM)Changing the way rare genetic disorders of obesity are diagnosed and treated, Rhythm Pharmaceuticals is developing cutting-edge therapies. As it gears up for key potential catalysts, the Street has its eye on this healthcare name.Back in May, the FDA accepted RYTM’s new drug application for setmelanotide, the company’s melanocortin-4 receptor (MC4R) agonist, in pro-opiomelanocortin (POMC) and leptin receptor (LEPR) deficiency obesities. With a PDUFA date set for November 22, an approval decision is right around the corner.Ladenburg analyst Michael Higgins points out that after an update from management, his bullish thesis remains very much intact.RYTM revealed that once weekly dosing of setmelanotide achieved similar results to the daily formulation, with comparable weight loss among treated patients exceeding placebo. “This data could set up a label expansion for setmelanotide following approval and may be particularly advantageous for pediatric administration, who are often most afflicted by POMC and LEPR,” Higgins commented.The analyst is also watching out for data from the pivotal trial evaluating setmelanotide in Bardet-Biedl Syndrome (BBS) and Alström syndrome, with data expected in Q4 2020 or Q1 2021, and the Phase 2 Basket Study of setmelanotide in high-impact heterozygous (HET) obesity and other genetic disorders, which could be released in Q4 2020.In a recent journal article highlighting setmelanotide in BBS patients, the published data further highlights the success of BBS patients who are taking setmelanotide, as efficacy measures increase with prolonged use. Higgins sees the article as encouraging, given that it was written by several reputable KOLs.Higgins points out that this pivotal patient data set is at least twice the size of the POMC/LEPR Phase 3 trial, conveying the increase in the size of the market opportunity. There are roughly 250 POMC/LEPR patients in the U.S., compared to approximately 2,000 BBS/Alström patients. As for the basket study, Higgins estimates there are tens of thousands of patients with MCR pathway disorders.Given all of the above, Higgins stays with the bulls. In addition to a Buy rating, he puts a $43 price target on the stock. Investors could be pocketing a gain of 95%, should this target be met in the twelve months ahead. (To watch Higgins’ track record, click here)Judging by the consensus breakdown, opinions are anything but mixed. With 4 Buys and no Holds or Sells assigned in the last three months, the word on the Street is that RYTM is a Strong Buy. At $38.67, the average price target implies 75% upside potential. (See RYTM stock analysis on TipRanks)To find good ideas for healthcare 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. TipRanks 3 Monster Growth Stocks That Are Still Undervalued What’s always in fashion on Wall Street? Growth. Given the current macro environment, however, compelling growth stocks have become even harder to spot. That said, despite the wild ride that has been 2020, a select few names could still shine bright and reward investors handsomely, so says the pros from the Street. These tickers don’t have just any old growth prospects, they are some serious overachievers. Along with a track record of upward movements since 2020 kicked off, their solid businesses could drive share prices higher through 2020 and beyond. Bearing this in mind, we set out to find stocks flagged as exciting growth plays by Wall Street. Using TipRanks’ database, we locked in on three analyst-backed names that have already notched impressive gains and boast strong growth narratives for the long-term. Wix.com Ltd (WIX) Founded as an online web development platform, Wix empowers its more than 72 million registered users to develop and create websites. Up 107% year-to-date, several members of the Street believe this name has plenty of fuel left in the tank. Writing for JMP Securities, five-star analyst Ronald Josey has been impressed, to say the least. In the most recent quarter, the company added 9.3 million net registered users, the most ever in a quarter, driven by its increased marketing spend to take advantage of the digital shift brought on by the COVID-19 pandemic. What’s more, Josey cites the fact that July new subscriber additions accelerated to 200%-plus as suggesting that the above trend is continuing to accelerate. However, he argues the most important growth indicator is cohort future collections, which was up over 90%, as “it talks to an elevated growth cadence of Wix’s Q2 new subscriber additions, and as Q2 trends continue into Q3, we believe this bodes well for 2021 and beyond (we note Q2 cohort collections were 66% year-over-year).” Adding to the good news, the number of customers adopting higher-value products, such as Business and eCommerce subscription packages, is trending higher. Payment transactions nearly doubled quarter-over-quarter, which Josey believes speaks “to the adoption of Wix’s eCommerce products while highlighting Wix’s longer-term opportunity in payments.” Josey added, “With accelerating trends around the adoption of Wix’s core products like Stores (which was recently upgraded), Ascend, and Payments, coupled with newer product offerings like Editor X (not in guidance), we are incrementally confident in Wix’s ability to navigate the current environment and the potential to deliver improving Collections growth for the foreseeable future.” Taking all of the above into consideration, Josey maintains a Market Outperform rating and $363 price target. This target conveys his confidence in WIX’s ability to climb 43% higher in the next year. (To watch Josey’s track record, click here) Where do other analysts stand on Wix? 14 Buys and 1 Hold have been issued in the last three months. Therefore, WIX gets a Strong Buy consensus rating. Given the $333.93 average price target, shares could surge 32% in the next year. (See Wix stock analysis on TipRanks) Bilibili Inc. (BILI) Next up we have Bilibili, which is a Chinese video sharing website based in Shanghai and centered around animation, comic and games (ACG). It has already notched a gain of 124% year-to-date, and some analysts believe that this growth story is anything but over. Five-star analyst Alex Yao, of J.P. Morgan, tells clients he is “incrementally positive on BILI’s growth outlook.” But what’s behind his bullish thesis? Yao noted, “Management’s comment of peak MAU reaching 200 million milestone in August 2020 makes us more positive on BILI’s long-term user growth beyond Gen-Z. We expect further user growth into Q4 2020 supported by League of Legend (LoL) World Championship Season 10 (in Sep/Oct 2020, BILI is one of the key broadcasting platforms).” To this end, the analyst estimates that MAU will surpass 400 million by 2023. On top of this, BILI saw strong advertising revenue growth in the second quarter, with it up 108% year-over-year. According to Yao, this result “demonstrates its strong attraction to advertisers driven by its rich content and growing user base,” with the analyst expecting its solid execution in both user expansion and revenue diversification to increase its long-term addressable market. Going forward, the company will most likely continue investing in branding and channel marketing to support user growth during strong seasonality. Expounding on the implications of this, Yao stated, “While such investment could expand near-term financial losses, we believe it could help BILI to accelerate user expansion and support monetization growth in the long run, as all of BILI’s revenue drivers (game, ads, subscription etc.) are directly linked to user growth.” As a result, the analyst sees further user growth as a major potential catalyst. The launch of new mobile games as well as the acceleration of content provider advertising platform Huahuo, which helps content providers connect with brand advertisers, could also drive significant upside, in Yao’s opinion. In line with his optimistic approach, Yao stayed with the bulls. Along with an Overweight rating, he keeps a $55 price target on the stock. Investors could be pocketing a gain of 32%, should this target be met in the twelve months ahead. (To watch Yao’s track record, click here) Turning to the rest of the Street, the bulls represent the majority. With 4 Buys and 2 Holds assigned in the last three months, the word on the Street is that BILI is a Moderate Buy. At $53.43, the average price target implies 28% upside potential. (See Bilibili stock analysis on TipRanks) MercadoLibre (MELI) Last but not least we have MercadoLibre, one of the largest eCommerce companies in Latin America. Given its rising market share, Wall Street thinks this name could see even more gains on top of its 89% year-to-date climb. After hosting a meeting with members of MELI’s management team, Credit Suisse’s Stephen Ju is even more confident in its long-term growth prospects. It should be noted that MELI expanded its category-take rates to Chile and Mexico in Q2 2020, with Brazil and Argentina set for 2H20 or early 2021. Ju points out that the resulting take rate rationalization could drive sellers to list more of their inventory and reduce prices. With this increased supply, he argues “MELI should be seeing the cascading benefits of an improving shopping experience and rising conversion rates.” Additionally, in the previous quarter, there was a sequential 23% decrease in unit shipping costs. The mix of Flex and MELI Logistics, which integrates with micro carriers through a software layer, has also been improving. Weighing in on this, Ju commented, “Its efforts to step up the buildout of its own logistics network to take down the dependency on Correios in Brazil is yielding these tangible results and also places the company to potentially underwrite a greater amount of free shipping subsidies as the unit cost of deliveries continues to decrease… All of this taken together means higher reliability, faster shipping times, and greater cost savings – which can be passed along to the consumer.” Going forward, MELI is expected to invest in Consumer Electronics and CPG categories to fill selection gaps and improve price competitiveness. According to Ju, its expanded logistics footprint could enable the company to capitalize on this opportunity, with it then going on to tackle the groceries market. If that wasn’t enough, despite the COVID-related headwinds, MELI has sold roughly 1 million mobile point-of-sale (mPOS) devices, versus 900,000 during Q1 2020, driven primarily by smaller merchants and SMBs. As the economy continues to reopen, TPV per device should also ramp up, in Ju’s opinion. The analyst added, “Also with ~20 million Payers not yet Active Buyers on the Marketplace, there is a cross sell/upsell opportunity above and beyond that of existing fintech products such as QR codes, MELI-branded credit/debit cards, consumer credit, and asset management/Fundo.” What’s more, Ju believes increased consumer recognition through brand advertising, particularly in Brazil and Mexico, could help fuel momentum. Everything that MELI has going for it convinced Ju to reiterate his Outperform rating. Along with the call, he attached a $1,484 price target, suggesting 37% upside potential. (To watch Ju’s track record, click here) In general, other analysts echo Ju’s sentiment. 9 Buys and 2 Holds add up to a Strong Buy consensus rating. With an average price target of $1,322.73, the upside potential comes in at 23%. (See MercadoLibre stock analysis on TipRanks) 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. Barrons.com Morgan Stanley analyst Stan Slotsky on Monday raised his rating on digital-signature firm DocuSign to Overweight from Equal Weight. MarketWatch Toyota, Hino team up to build fuel cell electric trucks for North America market Toyota Motor Corp.’s North America subsidiary and Hino Trucks announced Monday an agreement to jointly develop a heavy duty (Class 8) fuel cell electric truck for the North America market. The initial demonstration is expected in the first half of 2021. The companies said the collaboration, which will use the Hino XL Series chassis and Toyota’s fuel cell technology, expands upon the agreement announced earlier this year to develop a 25-ton fuel cell electric truck (FCET) for the Japanese market. Toyota had acquired majority ownership of Hino Motors in 2001. Toyota’s stock, which rose 0.1% in afternoon trading, has lost 6.2% year to date, while shares of electric truck maker Nikola Corp. have run up 126.6% this year and the S&P 500 has gained 5.1%. Barrons.com Earnings are expected to drop compared with last year’s as banks contend with a sluggish, but improving, economy, and low interest rates continue to weigh on net interest income. CoinDesk Stock of three major cryptocurrency mining firms are appearing in Fidelity, Vanguard and Charles Schwab mutual funds. More Stories
