Both analysts and company insiders love these stocks.
Everyone knows the adage that actions speak louder than words. So one way investors gauge what’s really going on inside a company is to ignore what company insiders are saying and instead focus on what they are doing. When management and company insiders are backing up their positive words by actually buying their company’s stock, investors can be more confident that something good is going on beyond company loyalty or blind optimism. Here are seven stocks that CFRA analysts love with insider ownership increases in the last year.
Alexion Pharmaceuticals (ALXN)
Alexion Pharmaceuticals’ prime product is monoclonal antibody therapy Soliris, which is used to treat rare diseases. Analyst Kevin Huang says Alexion shares are “significantly undervalued,” trading at around 11 times forward earnings projections. One of the reasons the stock is cheap is that Soliris is facing steep competition from biosimilar and branded challengers in coming years, and the drug accounts for nearly 80% of Alexion’s revenue. However, Huang says Alexion is playing defense by expanding Soliris’ indications and converting patients to its next-generation drug Ultomiris. CFRA has a “strong buy” rating and $159 price target for ALXN stock.
Nielsen Holdings (NLSN)
Nielsen Holdings is a global marketing data collection and analytics company. Analyst Colin Scarola says at least 70% of Nielsen’s revenue is locked up in contracts at least one year in advance, suggesting that the company will be able to ride out the economic downturn relatively well. Scarola is forecasting $510 million in 2020 free cash flow and says the stock is undervalued at current levels. Unfortunately, Nielsen and its investors must continue to deal with the rising overall costs of tracking media and online sales data. CFRA has a “buy” rating and $22 price target for NLSN stock.
ViacomCBS is one of the world’s largest media and entertainment companies and was formed in December 2019 via the merger of Viacom and CBS. Analyst Tuna Amobi says valuation is the core of his bullish thesis for ViacomCBS. The stock is down about 40% year to date, but Amobi says the market is underappreciating the value of the company’s streaming services, including CBS All Access, Showtime OTT and Pluto TV. In addition, Amobi says ViacomCBS has a strong balance sheet with ample liquidity and financial flexibility. CFRA has a “buy” rating and $20 price target for VIAC stock.
Diamondback Energy (FANG)
Diamondback Energy is a U.S. oil and gas producer and a Permian Basin pure-play operator. Analyst Stewart Glickman recently raised his price target for Diamondback and says the company remains relatively well-hedged through 2021 in a difficult oil market. In addition, he estimates that the company has only about $400 million in debt maturities through the end of next year. Glickman is forecasting $2.62 in 2020 earnings per share, and the stock pays an attractive dividend yield of about 3.7%. He says the dividend burden is manageable through at least 2021. CFRA has a “buy” rating and $55 price target for FANG stock.
Freeport-McMoRan is the world’s largest public copper producer and one of the largest global gold producers. Analyst Matthew Miller is bullish on long-term fundamentals in the copper market and says current and future supplies may not be enough to meet demand. In the long term, rising demand for electric vehicles and electronic devices will increase global copper consumption, he says. Projects at Grasberg, Indonesia, and Lone Star, Arizona, will fuel revenue growth for Freeport, Miller says. CFRA has a “buy” rating and $13 price target for FCX stock.
HollyFrontier Corp. (HFC)
HollyFrontier is one of the largest U.S. independent petroleum refiners. Glickman says weak oil prices have forced industry shut-ins, which have narrowed the price differential between Canadian crude oil and West Texas Intermediate. Glickman says new maritime fuel regulations in 2020 are generating more demand for refineries capable of processing high volumes of heavy/sour crude oil. S&P Global Platts is forecasting that the spread between Western Canadian crude oil and WTI will expand to about $15 per barrel in 2021, which is good news for HollyFrontier. CFRA has a “buy” rating and $34 price target for HFC stock.
Mosaic Co. (MOS)
Mosaic produces and distributes crop nutrients to the agricultural industry, including phosphates and potash. Analyst Richard Wolfe says phosphates and potash prices likely bottomed in early 2020 and will rebound throughout a strong U.S. planting season this year. In the longer term, Wolfe says a growing global population and improving diets will be tailwinds for fertilizer demand. In addition, he says automation will likely help Mosaic reduce mining costs. CFRA is projecting that earnings per share will grow from 35 cents in 2020 to $1.05 in 2021. CFRA has a “buy” rating and $15 price target for MOS stock.
Company insiders like these stocks:
— Alexion Pharmaceuticals (ALXN)
— Nielsen Holdings (NLSN)
— ViacomCBS (VIAC)
— Diamondback Energy (FANG)
— Freeport-McMoRan (FCX)
— HollyFrontier Corp. (HFC)
— Mosaic Co. (MOS)
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