With the return of volatility to the stock market after a period of record lows, here are five stocks that have low volatility (with a beta under 0.5) and a strong performance in the quarter.
A beta of less than 1 means that the stock is, theoretically, less volatile than the market.
These stocks also have the backing of Wall Street’s top stock pickers, with a “strong buy” analyst consensus rating. That’s according to TipRanks, a service that ranks analysts based on two factors: the average return and success rate of their buy-sell recommendations over the last year.
In other words, these analysts have the most profitable track records out of 4,700 tracked analysts.
1. Skechers USA (SKX)
Beta 0.26, up 21 percent in quarter
Shoe brand Skechers USA is primed for growth. Top Susquehanna analyst Sam Poser has just boosted his price target to $52 from $46. The new target is 33 percent higher than Friday’s closing price. Following a blowout fourth quarter earnings report, Poser said he is confident that the stock’s current momentum is here to stay.
“Another significant earnings beat reinforces our belief that SKX is at the beginning of a multiyear run of superior earnings growth and outsized investor returns,” he said.
According to Poser, the company’s domestic wholesale business is inflecting while the potential for growth in international markets is robust. He predicts that strong Chinese growth will enable management to meet its targeted $6 billion in revenue by 2020.
“A premium multiple is warranted as we are confident that the SKX business is on the verge of a material positive inflection,” Poser concludes in his Feb. 9 report. On Skechers specifically, Poser has a 72 percent success rate and 37 percent average return across 43 stock ratings.
In the last three months, Skechers has received 100 percent Street support with six consecutive analyst buy ratings.
2. 2U Inc (TWOU)
Beta -0.02, up 20 percent in quarter
Shares in this online education platform have more than doubled year to date. A stream of positive news announcements — from strong quarterly earnings reports to new partnerships and education programs — have kept 2U’s stock price rising.
Most recently, 2U officially announced that its second domestic graduate program will launch in 2019. On the news, top Key Banc analyst Monika Garg raised her price target to $83, representing a 9 percent upside potential. Her old price target was $73.
In her Jan. 30 report, Garg explains that she is now more confident in 2U executing and building its program pipeline. She also notes that encouraging cross-sell opportunities are beginning to emerge with recent acquisition GetSmarter. 2U Inc picked up online short course provider GetSmarter in May 2017 for $103 million.
For Oppenheimer’s Brian Schwartz this is just the beginning. He says: “We believe long-term investors will be rewarded over the years as 2U disrupts and transforms the post-secondary education landscape with little credible threat over the medium term.”
In the last three months the stock has received four back-to-back buy ratings from the Street’s best analysts.
3. Neurocrine (NBIX)
Beta 0.30, up 18 percent in quarter
Biotech firm Neurocrine Biosciences focuses on neurological and endocrine based diseases and disorders.
The Street is buzzing about Neurocrine’s Ingrezza drug, the first FDA-approved treatment for adults with tardive dyskinesia. This condition, afflicting an estimated 500,000 Americans, is characterized by uncontrollable, abnormal and repetitive movements caused by mental illness treatments.
In the fourth quarter, Neurocrine recorded net product sales of $64.5 million. Looking forward, Barclays’ Geoff Meacham says he is very optimistic about the drug’s potential. He anticipates strong commercial sales and forecasts robust organic growth in 2018.
Four-star Meacham reiterated his buy rating on Feb. 14 and ramped up his price target to $100 from $85. The new target is 18 percent higher than Friday’s closing price.
San Diego-based Neurocrine has received eight consecutive buy ratings from analysts in the last three months.
4. Abiomed (ABMD)
Beta 0.30, up 39 percent in quarter
Abiomed is the manufacturer of the AbioCor artificial heart and heart pump Impella. Shares in Abiomed rose 15 percent from $234 on Feb. 13 to the current share price of $268 after a key regulatory approval.
The company has now received an expanded Food and Drug Administration premarket approval for the Impella 2.5 and Impella CP heart pumps during elective and urgent high risk percutaneous coronary intervention procedures.
This is very good news, according to top Piper Jaffray analyst Matt O’Brien.
He keeps a “buy” rating on Abiomed and describes the approval as “a nod from the FDA on total heart recovery.” In his Feb. 13 report, O’Brien now forecasts improved growth prospects for Abiomed and recommends starting or building positions in the stock.
Overall, this stock has scored six buy ratings and just one hold rating in the last three months. At $289, the average analyst price target indicates upside potential of just over 11 percent
5. Bofl Holding (BOFI)
Beta 0.40, up 48 percent in quarter
BofI Holding, the parent company of BofI Federal Bank, is hitting on all cylinders according to B. Riley FBR’s Steve Moss. The company has just reported solid results and strong loan growth for the December quarter.
Most importantly, says Moss, BOFI was upbeat on loan growth and expansion opportunities, and this can create substantial earnings growth. He notes that the company repurchased shares in the fourth quarter, and this reflects its “expectations for strong growth in profitability.”
In his Jan. 31 investor report, he concludes: “BOFI remains a quality franchise with clean credit, solid loan growth, ample capital, and strong profitability.”
Moss reiterated his “buy” rating and raised his price target to $42, representing 9 percent upside potential. On this stock, Moss scores a 100 percent success rate and 41 percent average return.
In the last three months, BOFI has received four buy ratings and just one hold rating from the Street’s top analysts.