SWTX - Four Upgraded Stocks to Buy for 2021
The POWR Ratings can help you identify the highest-quality stocks to thrive during these difficult conditions. These exclusive ratings are updated every weekday, providing investors with invaluable insight into stocks worthy of investment as well as divestment. All in all, the POWR Ratings follow more than 6,000 stocks and ETFs. Hundreds of changes are processed daily to ensure investors are equipped with the information they need to make money trading stocks.
Below, we provide a look at four of the latest POWR Rating upgrades: Essent Group (ESNT), SpringWorks Therapeutics (SWTX), Skyline Champion Corp. (SKY), and United Natural Foods (UNFI).
Essent Group (ESNT)
ESNT provides credit protection to those who have invested in mortgages or lent money used to purchase a home or other property. ESNT covers part of the unpaid principal should default occur. ESNT has steadily climbed upward after its addition to the Standard & Poor's MidCap 400 index this past May. Though the economy is struggling to emerge from its current trough, the housing industry is booming, making life good for ESNT investors.
As long as the influx of new homeowners who purchased properties during the pandemic continue to pay their mortgage and federal assistance is provided by a left-leaning federal government, ESNT should hold strong as 2021 moves forward. ESNT has a low forward P/E ratio of 9.10, indicating the stock might be undervalued at $48.10 per share. The investors agree, establishing an average price target of $55.75 for the stock, meaning it has the potential to increase by nearly 16%.
Of the four analysts who have studied the stock, each of them recommends investors buy it. ESNT is a POWR Ratings superstar with "A" grades in the Peer Grade and Trade Grade components. The stock also has "B" grades in the Industry Rank and Buy & Hold Grade components. Of the 254 stocks in the Financial Services (Enterprise) category, ESNT is ranked fifth.
SpringWorks Therapeutics (SWTX)
SWNTX develops medicines that have the potential to prove life-changing. These products are developed to assist those struggling with cancer and rare yet severe diseases. Based in Stamford, SWNT’s top products include Mirdametinib and Nirogacestat that are in the clinical stage of development. SWTX was trading around $40 when the pandemic first began, slid down below $20 in response to the panic, and has since climbed upward toward $80.
SWTX's aim of acquiring and developing treatments for tumors makes it a potential takeover candidate, possibly by Eli Lilly. SWTX primarily aims to make money from in-licensing drugs rather than by discovering them. The potential for problems to arise during clinical trials might make SWTX's brass that much more receptive to a takeover attempt.
GlaxoSmithKline agreed to receive funding from SWXT in the early clinical-stage development of its nirogacestat product. The experts have set an average price target of $85 for the stock.
The POWR Ratings strengthen the case for SWTX all the more. The stock has "A" grades in the Buy & Hold Grade and Trade Grade components. SWTX also has "B" grades in the Industry Rank and Peer Grade components. The stock is currently ranked in the top 20 of more than 480 publicly traded companies in the Biotech space, meaning there is more than 6% upside remaining.
Skyline Champion Corp. (SKY)
SKY’s recreational vehicles are drawing that much more interest during prolonged social distancing. The pandemic is renewing interest in such vehicles as well as other outdoor activities such as golf and fishing. Furthermore, SKY designs and makes manufactured housing as well as park models for housing communities throughout North America.
The analysts have established an average price target of $34.33 for the stock, indicating it has the potential to increase by more than 5%. The POWR Ratings have SKY ranked third of 24 stocks in the Homebuilders category. The POWR Ratings show SKY has "A" grades in the Peer Grade and Trade Grade components. The stock also has a "B" grade in the Buy & Hold Grade component.
The housing crisis currently unfolding in North America bodes well for SKY moving forward. Interest rates are likely to remain at or near record lows through ’21, meaning the demand for SKY housing will hold strong, possibly helping the stock return to its 52-week high of $37.03.
United Natural Foods (UNFI)
UNFI is one of the continent’s top distributors of organic, natural, and specialty food products. All in all, UNFI has thousands of products highlighted by national and regional brands. The company’s grocery and general merchandise products are likely to help UNFI maintain its current price or even move higher as the pandemic continues, largely because people are still stocking up on the essentials.
The POWR Ratings show UNFI has "A" grades in the Buy & Hold Grade and Trade Grade components. UNFI is ranked 15th of 88 stocks in the Food Makers category. UNFI is merely a dollar or so away from its 52-week high of $23.38 yet its forward P/E ratio is merely 6.88, meaning it is likely undervalued.
Though the company's CEO will retire this July, the bottom line is UNFI's food items have the potential to propel the company to new heights as demand for its eat-at-home offerings continues to skyrocket. Furthermore, UNFI's brass has reduced operational fragmentation and complexity, setting the stage for an even better '21.
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ESNT shares were unchanged in after-hours trading Tuesday. Year-to-date, ESNT has gained 9.40%, versus a 1.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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