When stocks hit bottom, investors should take note. Stock prices fall for a reason, but those reasons don’t always mean that the stock is unsound. In fact, some fundamentally strong equities can fall to rock bottom prices – and when that happens, it’s a buying opportunity.
Wall Street’s analysts are frequently on the alert for these cases, as they generally offer investors some of the best upside potentials in the market.
Using TipRanks’ database, we pinpointed three stocks whose price has fallen low – but in these cases, the analysts see the low price as a gateway. These are Strong Buy stocks, according to the analyst community, with an upside of 60% or better for the year ahead. Let’s take a closer look.
New Fortress Energy (NFE)
We’ll start in the natural gas business, where New Fortress works to bring ‘clean and affordable’ energy to the global marketplace. The company funds the development and construction of natural gas energy infrastructure projects in Europe, Latin America, the Caribbean, and the US. Projects include gas facilities, power plants, and logistic solutions. And while energy is a vital, essential commodity, New Fortress shares have fallen 50% so far this year.
That share depreciation has come even as the company’s top line revenues have been rising steadily. New Fortress has posted 7 sequential revenue gains in the last 8 quarters. The company’s 2Q21 top line, at $223.8 million, was up an impressive 136% year-over-year.
Rising revenue have been riding on expanding business. New Fortress announced this month that it had finalized the terms for its supply of natural gas to the Alunorte Alumina Refinery in the state of Para in Brazil. Also this month, the company entered a contract with the Sri Lankan government for a Liquified Natural Gas terminal and investments in the country’s power plants.
But even as revenues gain and business expands, the company just couldn’t seem to get earnings into positive territory. EPS in the second quarter came in at a 3-cent loss, an improvement from the 21-cent loss in Q1, but still the eighth consecutive quarterly earnings loss in a row.
JMP’s 5-star analyst Devin Ryan, however, sees New Fortress in a different light, believing that the company is in process of shoring up its business for the long term.
“We continue to focus much more on the longer-term trajectory of the business, which we believe is accelerating nicely (consistent with expectations), with much of the infrastructure now set in place (as well as the upfront cost to build)... we appreciate that quarterly results will ebb and flow as commercialization continues, we continue to believe that the longer-term trajectory of NFE’s businesses and operations remains intact, and the increasing scale, logistical network, and favorable LNG pricing create notable competitive advantages,” Ryan wrote.
In light of these comments, Ryan rates NFE shares an Outperform (i.e. Buy), and his $69 price target implies growth of 160% for the year ahead. (To watch Ryan’s track record, click here)
Let’s turn our attention now to the rest of the Street, where based on 6 Buys and just 1 Hold, NFE currently carries a Strong Buy consensus rating. With an average price target of $50.71, the analysts project a solid 90% upside over the next 12 months. (See NFE stock analysis on TipRanks)
Integra Resources Corporation (ITRG)
Next up, Integra, is a gold and silver mining company, with major development projects in southwestern Idaho. The company’s projects focus on exploration and de-risking of past-producing mins, to extract remaining gold and silver deposits. As such, Integra has not yet developed a revenue stream, and continues to run quarterly losses.
This highly speculative mining company has seen its shares fall 40% year-to-date, while it strives to explore and reopen its mines. The potential here is real – historically, the four mines that Integra is exploring produced millions of ounces of gold and hundreds of millions of ounces of silver, and Integra’s test bores have revealed veins of ore deposits that are economically viable. The company is still in the process of drilling test bores to determine the best locations for full-scale mining operations.
Looking ahead, H.C. Wainwright's 5-star analyst Heiko Ihle sees potential positive catalysts that could unlock Integra's potential, and bring value to shareholders.
"Integra intends to maintain three drill rigs in operation, with two rigs targeting the DeLamar deposit and the third rig turning at War Eagle in the coming weeks. Additionally, the company continues to push its pre-feasibility study for completion in 4Q21, as all column leach tests for Florida Mountain have been taken down, with oxide composites complete and final assays being processed for transitional composites," Ihle noted.
Ihle has faith in the potential of Integra’s projects, and rates the stock a Buy, with a $7 price target. Investors stand to pocket ~185% gain should the analyst's thesis play out. (To watch Ihle’s track record, click here)
The rest of the Street appears to echo Ihle's sentiment. As it has racked up 4 Buys and no Holds or Sells, the consensus is unanimous: ITRG is a Strong Buy. Adding to the good news, the upside potential lands at 138% based on the $5.53 average price target. (See ITRG stock analysis on TipRanks)
Take-Two Interactive (TTWO)
Take-Two is a major online gaming company, a $16 billion dollar holding company whose subsidiaries, Rockstar Games and 2K, control several major game franchises, including the popular ‘Grand Theft Auto’ and ‘Civilization’ series. Other titles include ‘Borderlands’ and ‘NBA 2K.’ Take-Two operates in the company of heavy hitters in its industry, and offers its products for both desktop and mobile users.
Earlier this year, Take-Two continued its expansion through the acquisition of Nordeus, the developer of the football simulation ‘Top Eleven.’ The move expanded TTWO’s mobile offerings, with a popular sports offering ahead of the fall football season.
While gaming is popular, Take-Two’s shares are down by 30% this year. The share losses come even while the company is beating expectations on the financial front. It announced financial results for its fiscal Q1, which ended June 30, during August, and the EPS, at $1.30, clobbered the forecast 89 cents. At the top line, however, the $813 million in total revenue was down 2% from the year-ago quarter. Net bookings, a key metric for game expansion, rose above guidance to $711 million. The company reported net cash from operations down, however, from $445 million to $148 million in the last 12 months.
Among the bulls is Wells Fargo's 5-star analyst Brian Fitzgerald, who rates TTWO an Overweight (i.e. Buy) along with a $235 price target. The figure shows his confidence in a 61% one-year upside. (To watch Fitzgerald's track record, click here)
"CEO Strauss Zelnick left us confident that management will continue to invest capital wisely, creating significant shareholder value over a 5y horizon. Mgmt made clear that EBIT margins should head higher starting FY23, and to record levels subsequently, with ambitions to match its peers," Fitzgerald stated.
The analyst added, “TTWO may likely bring in some core mobile titles within the next few years. TTWO could partner with external developers. Expect to see growth in natively developed mobile titles.”
This gaming company has generated plenty of interest on Wall Street, and boasts no fewer than 16 recent analyst reviews. These break down 13 to 3 in favor of Buy over Hold, for a Strong Buy consensus. The average price target of $209.50 implies an upside potential of 44% from the $146.07 trading price. (See TTWO stock analysis on TipRanks)
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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