Let’s talk about losses. Specifically, let’s talk about individual stock losses during a time of generally rising markets. While these situations can define stocks that are fundamentally unsound, they can also highlight stocks that are primed for rapid gains.
To start with, we’re still in a long-term bullish trend. It got started back in March of 2020, when the economy hit bottom during the initial stage of the pandemic crisis. Since then, that first bounce back up has turned into a strong and sustained market rally. The S&P 500 has gained 28% in 2021, and the NASDAQ, despite a more volatile December, is up 23% for the year.
Some stocks, however, haven’t joined in the general rally. This doesn’t mean that investors should avoid them; there are plenty of reasons an otherwise sound equity can fall in price. We can rely on Wall Street’s stock analysts to help sort the wheat from the chaff here, finding the stocks that have hit some bad luck but still hold potential for gains.
Using TipRanks’ data, we’ve found three stocks whose share price is bouncing around the bottom – but which also hold Strong Buy consensus ratings and show triple-digit upside for the coming year, according to the analyst community. Here are the details.
We’ll start in the healthcare industry. The current environment, with COVID still burning around the world, has focused attention on this sector, and investors can find numerous options here, from research-oriented biopharmas to administration providers. CareCloud is one of the latter, a tech provider for medical and healthcare companies. It was called MTBC until March of 2021, and while it changed its name, it did not change its core business; the company offers cloud-based solutions and tech support for back office needs including medical billing, practice management, and transcription.
Over the past year, CareCloud has delivered for investors on both the top and bottom line. Revenues posted strong year-over-year gains in each of the first three quarters of the year, with the Q3 result showing 21% growth to reach $38.3 million. The company runs an EPS loss, but that loss has been moderating; the 15 cent loss recorded in Q3 was the lowest since 4Q19, and compares favorably to the 46-cent loss recorded in 3Q20.
The company has delivered this performance while also launching new products. In mid-December, the company announced the launch of CareCloud Connector, a data integration tool to improve management and deployment speed. CareCloud Connector is the first product released in the CareCloud Conductor suite.
Despite these positive signs for the company, MTBC shares are down 45% this year. In coverage for Cantor, 5-star analyst Steven Halper explains why he sees this drop as an opportunity for investors.
“Management [has] emphasized the company’s focus on expanding its total addressable market (TAM), both organically and inorganically. In 3Q21, MTBC announced the rollout of CareCloud Conductor, which expands the company’s reach into multiple new healthcare IT markets. We remind investors that MTBC acquired medSR in June 2021, which deepened the company’s footprint in the health system market. Despite a relatively slow M&A quarter, MTBC continues to execute on its long term growth strategy,” Halper opined.
Acknowledging the strength of the company’s forward plans, Halper rates MTBC shares an Overweight (i.e. Buy), and his $15 price target suggests an upside of 199% for the year ahead. (To watch Halper’s track record, click here)
Looking at the Street’s consensus rating here, we can tell that Halper’s bullish view is mainstream. CareCloud has 6 reviews, and they all agree that it’s a stock to buy, for a unanimous Strong Buy rating. The shares are priced at $5.52 with an average price target of $17.50, somewhat higher than Halper allows, and suggesting a one-year upside of 217%. (See MTBC stock analysis on TipRanks)
GreenPower Motor (GP)
Next up is GreenPower Motor, one of the many companies that is springing up to take advantage of new openings in the electric vehicle (EV) market. GreenPower focuses on all-electric commercial vehicles, particular transit busses for the urban markets. This is the passenger version of the ‘last mile delivery’ niche that commercial EV makers are developing; by designing vehicles specifically for short-range use in urban markets close to the home charging points, they can minimize the drawbacks of limited battery range.
In recent weeks, GreenPower has made several announcements highlighting the successful development and marketing of its vehicle lines. Back in early November, the company unveiled a partnership with Perrone Robotics, a maker of autonomous vehicle tech, to develop an autonomous delivery truck based on GreenPower’s AV Star line of electric vans. The companies plan demonstrations and test rides at an event in early January.
In early December, GreenPower unveiled its BEAST, a Type D battery electric school bus. This is a 40-foot, heavy duty bus fit for 90 passengers and designed to meet the requirements of school district transportation departments.
Finally, in mid-November, the company released its financial results for fiscal 2Q22. GreenPower showed total revenues of $4.36 million, on the delivery of 44 vehicles in the quarter. This was up from 15 vehicles delivered and $2.8 million in revenue in fiscal Q1. The company reported working capital of $31 million at the end of the quarter. On a negative note, the company’s net loss remains steep, and at $1.37 million was deeper than the Q1 loss of $1.12 million.
GreenPower’s shares have been falling steadily all year. The stock is down 74% from its $32 peak, reached in January.
Christopher Souther covers GreenPower for B. Riley Financial, and is impressed with the company’s ability to execute on production. He writes, “The company exited the quarter with 70 vehicles in finished good inventory and 260 vehicles in various stages of production. Management expects to deliver substantially all of the 70 finished vehicles and a portion of the 260, once completed, over the next 2 quarters…”
“In our view,” the analyst added, “deliveries are likely taking longer than we previously expected due to customers waiting for clarity on the policy front. The company’s pipeline continues to grow despite near-term visibility somewhat clouded, which we believe will clear once infrastructure bill/other government funding becomes more evident. We continue to like GP’s positioning in the growing medium- and heavy-duty vehicle market with its unique, validated product.”
Souther’s comments back up his Buy rating, and his $24 price target implies a robust upside of ~190% for the next 12 months. (To watch Souther’s track record, click here)
While GreenPower’s Strong Buy consensus rating is not unanimous, it is based on a 3 to 1 split in favor of Buy over Hold reviews. The stock is currently selling for $8.20 and the average price target of $23.86 implies an upside of ~191% from that level. (See GP stock analysis on TipRanks)
Codiack BioSciences (CDAK)
Last but not least is Codiak BioSciences, a company taking a unique approach to the development of therapeutic agents. Codiak is working with exosomes, the degradation mechanism RNA, to create a new class of medicines capable of transferring genetic material for therapeutic effect. Codiak has created a propriety exosome engineering platform (engEX) to develop drugs for the treatment of a wide range of disease conditions, all with high unmet medical needs.
Codiak’s exosome development has created proteins that carry drug molecules through cell walls by mimicking viral pathways – but without the disease effects of a virus. The development program has potential to create medicinal agents that will target particular cells, and carry precise drug molecules directly to the target area.
The company’s pipeline currently has 10 separate research tracks, eight in discovery and preclinical phases, and two in Phase 1 human clinical trials. The two active clinical trials involve exoIL-12, a treatment for several cancers, including CTCL, melanoma, TNBC, MCC, Kaposi & GBM. The trial has been ongoing for over one year. The trial has 12 healthy volunteer and patients with early stage cutaneous T cell lymphoma. The company plans to add other cancers to the trial pending early data.
The second clinical trial underway involves exoSTING, a potential treatment for solid tumor cancers. The current clinical trial is at Phase 1/2, and is testing the drug’s efficacy against several solid tumors, including metastatic head and neck squamous cell cancer, triple-negative breast cancer, and cutaneous squamous cell carcinoma.
Finally, at the end of November, the company announced that it had received clearance from the FDA, in response to the IND submission, to begin the trial of exoASO-STAT6, a treatment for myeloid-rich cancers. Patient dosing in the Phase 1 clinical trial is set to begin in 1H22.
In another important development, Codiak announced in December new pre-clinical data from its exoVACC vaccine research platform. The data release showed that the exosome-based vaccine platform can cause a comprehensive immune response to SARS-CoV-2, and shows potential against multiple SARS-CoV-2 variants.
These are all solid developments for the company, and show an active research program with a high potential – but even so, the stock is down 68% this year.
According to Wedbush’s 5-star analyst David Nierengarten, however, investors can use this as an opportunity. Nierengarten says of Codiak’s pipeline: “While CDAK’s exoVACC technology is still in early stages, we think the data presented demonstrate the advantages and potential applications of an exosome-based platform in vaccines, particularly for rapidly mutating viruses. In the nearer term, we continue to look to the updated Ph 1/2 exoSTING data, and the initial safety and early efficacy data for exoIL-12 expected in 1H22, as the main catalysts for CDAK shares.”
To this end, Nierengarten rates CDAK shares an Outperform (i.e. Buy), while his $34 price target indicates room for 226% share growth going forward next year. (To watch Nierengarten’s track record, click here)
Overall, this stock has a unanimous Strong Buy consensus from the Street, based on 3 positive reviews. The average price target of $39.50 is even more bullish than Nierengarten’s and implies a one-year upside potential of 280% from the current trading price of $10.45. (See CDAK stock forecast at 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.
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