We had a solid bull market last year, and so far this year, stocks are continuing their winning streak. A look at the NASDAQ shows a 30% gain over twelve months, and the S&P 500 index is up 25% over the same period. It’s an environment where investors are looking for solid picks with more room to run.
The usual step is to buy low and sell high, but that’s not the only way to find a winning investment. There are plenty of good investments to be found in stocks that have already given us the ‘show-me’ story, with strong outperformance in recent months. Although these stocks are rising, their outperformance doesn’t mean they’ve hit the wall. They often still have room for more growth.
Wall Street analysts look exactly at that theory and pick stocks that have posted triple-digit percentage gains over the past twelve months and are still going strong. We opened the database on TipRanks, to look at the latest scoop on two such stocks; each has a Strong Buy consensus rating from the Street and upbeat commentary from the analysts. Here are the details.
Soleno Therapeutics (SLNO)
We’ll start with Soleno Therapeutics, a biopharmaceutical company working to develop new drug candidates to treat rare genetic diseases. The company recently completed a series of clinical trials of its lead candidate, diazoxide choline, or DCCR, and submitted its new drug application to the FDA. The agency is expected to announce whether the drug has been accepted for review by the end of August.
DCCR was developed as a treatment for Prader-Willi syndrome, a serious, life-altering genetic disease typically diagnosed in early childhood. The drug, a proprietary extended-release formulation of a crystalline salt of diazoxide, was tested in a once-daily oral tablet formulation and showed clinically significant positive results in clinical trials. DCCR has shown great potential as a treatment for hyperphagia, or excessive hunger, often associated with Prader-Willi.
The company’s progress in developing DCCR and moving through the clinical trial and regulatory submission process has put the stock on solid footing over the past year. In September last year, following a positive release of data on 77 patients in the clinical program, the stock jumped from $4.43 to over $26 – and has continued to rise ever since. Over the past twelve months, SLNO shares have risen by as much as 869%.
Baird analyst Brian Skorney has taken a bullish position on Soleno based on DCCR’s potential. He believes this drug, with a potential patient base of between 8,000 and 10,000 in the US, is on track for approval – a good prospect for investors. He writes of the company: “We believe regulatory approval of Soleno’s lead drug candidate is more likely than the market currently believes. The FDA has talked openly about the need to adapt to studies conducted during COVID (as was the case here) and to be flexible when it comes to rare diseases (also the case here). Ultimately, we see DCCR fitting in well with a series of recent orphan drug approvals that have all resulted in significantly larger opportunities (despite regulatory controversy) than implied by Soleno’s valuation.”
Skorney subsequently rates SLNO stock an Outperform (Buy) rating, and his $72 price target implies nearly 40% upside potential over the next twelve months. (To view Skorney’s track record, click here)
Although there are only four recent reviews on this stock, they are unanimously positive, giving the stock a Strong Buy consensus rating. The stock has an average price target of $70.75, which suggests an upside of 37% from the current trading price of $51.55. (To see SLNO stock forecast)
MoneyLion (ml)
The next stock on our list of big winners is MoneyLion, a fintech company in the personal banking segment. The company offers a wide range of personal financial services, including advice, lending and investment options, with all services aimed at the consumer market. MoneyLion had 14 million customers last year and targets the “average American,” the majority of the U.S. population who are making ends meet while surviving paycheck to paycheck. The company makes a range of streamlined, high-quality financial options available to this customer base.
MoneyLion brands itself as a populist financial services company, one that uses technology to expand its product offering. The company offers “access for all,” allowing low-heeled consumers to enjoy personalized banking and make informed financial decisions. MoneyLion handled around 205 million customer queries last year, an average of more than 50 million per quarter.
All this makes for a popular service, which, according to the company’s Q1 24 report, has brought in 15.5 million customers – a 98% year-over-year increase. In its financial results, the company reported $121 million in quarterly revenue, up 29% year over year and beating forecasts by $4.69 million. The company posted earnings of 60 cents per share by GAAP in the quarter – a figure that beat expectations at 68 cents per share. Additionally, GAAP net income total of $7 million marked a quarterly record for the company.
The strong results have helped the stock, which is up as much as 635% in the past twelve months.
For Lake Street’s Jacob Stephan, it’s the combination of execution and potential for further growth that is part of the appeal here. “We believe MoneyLion has well diversified its corporate segment revenues with adjacent product offerings,” the analyst said. “The personal loan revenue mix is now only 60% of sales, compared to 90% at the time of the acquisition. Management has emphasized that further diversifying the business revenue mix is a focus for 2024, and we expect to see more credit card, mortgage and insurance offerings appear on the platform. Ultimately, we believe more shots on target (offers) will result in more goals (offer redemptions) for MoneyLion.”
Stephan follows this up with a buy rating on the stock, and a $109 price target, which indicates an upside potential of 25% over one year. click here)
We take another look at a stock with four unanimously positive analyst reviews and a Strong Buy consensus rating. The shares are trading for $87 and have an average price target of $114, suggesting a one-year gain of nearly 31%. (To see MoneyLion’s stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best stocks to buya 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 for informational purposes only. It is very important to do your own analysis before making an investment.