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Analysts say “Buy the Dip” in these 3 stocks
Smart stock investing shouldn’t be emotional, but investors are only human after all, which makes it difficult to pursue a rational trading strategy. Investors should remember Warren Buffett’s advice: “We just try to be fearful when others are greedy and only be greedy when others are fearful.” What Buffett advocates is the oldest market advice: buy cheap and sell dearly. With this in mind, we started looking for compelling investment opportunities that trade at a discount. Using the TipRanks database, we were able to find 3 stocks that are below their recent highs while some Wall Street analysts recommend buying the dip. Let’s take a closer look. Teladoc Health (TDOC) We’re starting Teladoc, a remote medical care service that uses online networks to connect patients with doctors for non-urgent matters, including ear, nose and throat problems, laboratory referrals, basic medical advice and diagnosis, and prescription refills for non-addictive drugs. In the company’s words, “GPs long distance calls,” which uses digital technology to offer old-fashioned service. Teladoc’s service is in high demand, and in the Corona year the company flourished – its business model was a perfect fit for the COVID-19 pandemic conditions. In 2020, total annual sales increased 98% year over year to 1.09 billion, and total patient visits increased 156% to 10.6 million. In addition, the company completed its $ 18.5 billion merger with competitor Livongo in October. Teladoc shareholders now control 58% of the combined company. While the move increases Teladoc’s capabilities and potential patient base, it also meant the company incurred heavy costs in the fourth quarter. Teladoc had to pay cash for the merger, and as a result, fourth quarter results showed a strong EPS loss of $ 3.07 per share. In addition to the net loss in the fourth quarter, investors are also concerned about the guidelines for membership in 2021. In particular, the number is likely to be somewhere between 52 and 54 million, representing a + 3.4-7.4% year-over-year growth. That’s a sharp drop of + 40% in 2020 and + 61% in 2019. The stock has fallen 37% since its most recent high in mid-February, but Canaccord’s 5-star analyst Richard Close says to buy that drop . “Ray of hope such as multiple product sales, increasing occupancy, new registrations and visitor growth in non-infectious areas surpass membership when all is said and done. Opportunities have arisen in the past to get into Teladoc (or accumulate shares in Teladoc) – we believe this is one of the ways, ”stated Close confidently. Close supports these comments with a Buy recommendation and a price target of USD 330, which implies an upward movement of 78% over the next 12 months. (To see Close’s track record, click here.) Overall, Teladoc has generated a lot of interest in Wall Street. There are 21 ratings for the stock, 13 to buy and 8 to hold, giving TDOC a moderate buy consensus rating. The stock is selling for $ 185.43 while the average target price of $ 255.05 suggests an uptrend of ~ 38% for a year. (See TDOC stock analysis on TipRanks) Agnico Eagle Mines (AEM) Moving from medical care to mining, owning a gold mine is sometimes the next best thing to owning the gold. Agnico Eagle has been a Canadian gold mining company for over 60 years. The company has active mining operations in Canada, Mexico and Finland and saw strong production in 2020. The Company’s Q4 report indicated over 501,000 ounces of gold produced at a cost of $ 771 per ounce versus a total cost of $ 985 per ounce. This quarterly output was doubled for the full year 2020. Total gold production was more than 1.73 million ounces, the high end of the previously published annual forecast, and the cost of production per ounce was $ 838, well below the total annual sustainable cost of $ 1,051 per ounce. High production – the fourth quarter number was a company record – resulted in high revenues. Agnico reported net income of $ 205.2 million for the fourth quarter, equivalent to 85 cents per share. For the full year, earnings were $ 511.6 million, or $ 2.12 per share. That number included the 9 percent per share loss in the first quarter and was still 6% above 2019 value. Despite the strong 2020 full year numbers, AEM shares have declined since earnings release, by around 21 % of their value fallen. While the company is profitable and manufacturing is living up to expectations, fourth quarter earnings declined 7.6% sequentially and 38% year over year. On this stock for CIBC, analyst Anita Soni said: “We believe the market reaction to the quarterly results was exaggerated and we would advise investors to improve their positions in the downturn. We continue to prefer Agnico for its prudent track record of capital allocation, largely organic growth strategy, exploration expertise (as demonstrated by strong reserves and resource replenishment in a COVID-hit year), project pipeline and strong management. “In light of these comments, Soni set a price target of $ 104 with an outperform valuation (i.e. buy valuation). Their target implies a one-year upside potential of 73% from current levels. (To see Soni’s track record, click here.) Overall, Agnico Eagle received a consensus rating for Strong Buy analysts based on 12 recent ratings, including 9 buys for 3 holds. The share price is $ 60.12, and the average target price of $ 85.62 implies upside potential of 42% for the year ahead. (See AEM stock analysis on TipRanks) Redfin (RDFN) Last but not least, is Redfin, a Seattle-based online real estate agent, with a business model based on modest fees (in the% 1 to 3%) sellers must list their homes and for completing the sale. The company is committed to speeding up the home tour and listing debut and escrow processes faster and easier. Redfin posted fourth quarter revenue growth of 4.7% year over year, with revenue reaching $ 244 million. At 11 cents, EPS was well above the net loss of 8 cents recorded in the same quarter of the previous year. Both numbers significantly exceeded Wall Street’s estimates. For the full year 2020, the net loss was $ 18.5 million, or less than a quarter of its 2019 value. Since earnings were released, RDFN shares have fallen 25%. Investors are somewhat shocked by the company’s forecast for the first quarter as it posted a quarterly loss in the range of $ 36 million to $ 39 million. That is more than 2020’s total loss, and there is concern that Redfin will slide from profitability. The company is facing headwinds to growth driven by two factors: a lack of agents and a lack of properties to be listed. The first factor can be achieved through a hiring offensive, but the second is beyond the control of the company – and is only partially offset by higher property values. Ygal Arounian, 5-star analyst at Wedbush, wrote a note on Redfin called “Buy the Dip, There’s a Lot to Like Here”. “The strength of the real estate market continues to translate into significant benefits for Redfin where it struggles to keep up with demand. Customers seeking service from agents were +54 year-over-year even after Redfin made changes to its website that prevented customers from requesting tours when an agent was unlikely to be available, “Arounian wrote. The analyst added added: “Redfin still doesn’t have nearly the amount of agents it needs to demand and aggressively hire to get there. Agent recruitment for lead agents increased ~ 80% in December / January compared to September / October. Redfin also sees increasing repetition rates and referrals that can support growth for longer. “To that end, Arounian set a price target of $ 109 on the stock, indicating its confidence in a 57% uptrend for a year and confirming its outperform rating (i.e. buy rating). (To see Arounian’s track record, click here.) Redfins stocks have 10 recent ratings with a breakdown of 4 buys and 6 holds for an analyst consensus rating from Moderate Buy. The average target price is USD 87.71, which is an upward movement of 27% from the trading price of USD 69.22. (See RDFN stock analysis on TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, ‘a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.