Are you unhappy with the state of your portfolio after the miserable stock market action of 2022? You’re probably far from alone. Most investors have struggled to make headway in this year’s ongoing bear market, which has provided only brief periods of relief.
However, as the year draws to a close, Jim Cramer, the well-known host of CNBC’s “Mad Money” program, thinks the bears are showing signs of exhaustion, and that’s good news for battered investors.
“You have to adjust your thinking to a world where the bears finally retreat, because I bet the next four weeks are going to be a lot better than what we’re used to,” Cramer said.
With that in mind, let’s take a closer look at two stocks that recently received Cramer’s endorsement in his “lightning” segment. According to TipRanks database, Cramer isn’t alone in thinking these tickers are ripe for the picking; both are rated strong buys by the analyst consensus. Here are the details.
MP materials (MP)
The first name we’ll look at is “winner,” according to Cramer. MP Materials is a North American-based rare earth miner. Its deposit-rich Mountain Pass mine in California is the largest rare earth mine and processing facility in the United States and provides the company with ~15% global market share in upstream rare earth production.
Its production is mainly focused on neodymium-praseodymium (NdPr), a rare-earth element used in high-strength permanent magnets that drive traction motors used in electric vehicles, drones, wind turbines, robotics and other cutting-edge propulsion technologies.
Being able to produce much-needed components used in segments that are perceived should be a recipe for success, and the company is banking on the rise in realized rare earth oxide prices in its latest Q3 earnings report.
Despite the COVID-19 lockdown in China and global economic difficulties that have led to a consistent decline in NdPr prices, average prices have risen significantly over the year, highlighting continued strong demand for NdPr.
Revenue rose 24.8% year-over-year to $124.45 million, beating the Street’s call for $6.73 million. The increase in revenue led to 34% year-over-year growth in adjusted EBITDA, which reached $91.4 million. As a result, adj. EPS of $0.36 also beat the Street estimate of $0.30.
So Cramer thinks MP is a “winner” and so does the BMO analyst Robin Fiedler.
“MP is a rare earth pure play with a Tier 1 asset among scarce alternatives. We view MP’s unique and multifaceted vertical integration and Chinese supply chain bypass strategy as compelling and thus capable of overcoming near-term pricing and expansion risks,” the analyst said. “We believe that at current levels, the risk-reward ratio is attractive, given our assessment of medium to long-term vertical integration growth and the potential for various legislative ‘wins’ over the coming year.”
Accordingly, Fiddler rates MP stock as an outperform (ie, buy), while his $50 price target makes room for 12-month gains of 53%. (To watch Fiedler’s record, Press here)
Fiedler’s view of MP is bullish – and he’s far from the stock’s only bull. MP has 7 recent analyst reviews, with 6 buys and 1 hold for a strong consensus rating of buy. Shares are priced at $32.68 and their average price target of $44.93 suggests ~37% one-year upside potential. (See MP Materials stock forecast at TipRanks)
ICON AD (ICLR)
“I like it. It’s a very cheap stock. That’s Cramer’s short and sweet explanation for backing the next company we’re going to look at.
Icon is a big name in the world of clinical research organizations (CROs). That means the company helps pharmaceutical, biotech and other research labs get their work done. It is one of the biggest names in the sector offering all services. These include everything from strategic development, program analysis and complex selection assistance to patient recruitment and retention, site monitoring and data management, among others.
Icon has undergone major changes over the past year and a half. In July 2021, the company completed the acquisition of contract research company PRA Health Sciences in a ~$12 billion deal, creating what it touts as “the world’s most advanced health intelligence and clinical research organization.”
On the financial front, Icon’s latest statement was successful. In its third-quarter report, the company generated revenue of $1.94 billion, which was $10 million above Street expectations. Likewise, EPS of $1.94 beat analysts’ estimate of $1.82. The company also confirmed its full-year 2022 earnings and cor. EPS manual.
JP Morgan analyst estimate third-quarter press Casey Woodring believes the long-term case remains “intact”, while stressing the importance of the FRAH deal.
“We are encouraged by how the company performed in 2022 and view the repetition of LT targets through 2025 as a positive indicator of ICLR’s overall market health and competitive positioning,” the analyst wrote. “We continue to view ICLR as a top-tier clinical CRO with a compelling financial profile that is more aligned with big pharma during this time of mild biotech uncertainty, along with upside potential from new businesses gains resulting from the company’s scale and integrated capabilities from the PRAH transaction.”
These comments underlie Woodring’s Overweight (ie, Buy) rating, which is supported by a $265 price target. The implications for investors? An increase of ~22% from current levels. (To watch Woodring’s record, Press here)
Overall, ICON is getting solid support from the Street; ratings split 7 to 2 in favor of buy over hold, culminating in a consensus rating of strong buy. The average target is slightly lower than Woodring’s target; at $259, the figure suggests a one-year upside potential of ~20%. (Check out the ICLR stock forecast at TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.