TipRanks 'Perfect 10' List: These 2 Stocks Send a Bullish Signal

Are the stars realigning? Unexpectedly good news in the inflation print for October boosted the markets in the trading sessions on Thursday and Friday. The S&P ended the week down 6% and cut its year-to-date loss to 16%.

We don’t yet know if this rally will be a short-term phenomenon in a larger bear market, or if it will prove to be a more sustained rally — but either way, investors can turn to the data to find solid stock picks.

But which data? If there’s one thing that’s always certain in the stock market, it’s that trading activities generate mountains of information. This is where Smart Score on TipRanks This data aggregator and benchmarking tool aggregates the facts about each stock, collected and organized according to 8 factors, each known to correlate with stock price performance, and distills them into a single score on a scale of 1 to 10. Investors can tell at a glance where the stock stands – a score of 1 or 2 indicates plenty of trouble, while a Perfect 10 Smart Score is definitely a bullish signal that any investor should be looking for.

So let’s dive into Smart Scores and find some perfect 10 picks for investors to consider.

The Chef’s Warehouse (COOK)

We’ll start in the specialty food niche, with Chef’s Warehouse. This company has built itself to be a one-stop shop for top chefs across North America, with warehouse operations and locations in major metropolitan areas of the US and Canada. The company started 30 years ago and today serves a wide range of caterers, gourmet retailers, hotels, restaurants, providing every conceivable specialty food or ingredient as well as the essential proteins at the center of the plate.

Chefs’ Warehouse has until recently operated exclusively in North America. But that changed with the announcement earlier this month that the firm had acquired Chef Middle East, a leading specialty food distributor operating in the UAE, Qatar and Oman and serving more than 3,000 customers. The acquisition, which cost Chefs’ Warehouse $100 million, gives the company an international footprint and entry into the Gulf Cooperation Council business scene.

This move into the international market comes after Chefs’ Warehouse posted a year and a half of overall revenue growth, marking a strong recovery from the forced closures of the COVID pandemic. In the company’s most recent quarter, fiscal 3Q22, which ended Sept. 24, Chefs’ Warehouse posted top-line revenue of $661.9 million, a 36% year-over-year gain. The company ended the quarter with $145.4 million in cash and other liquid assets and adjusted earnings per share of 41 cents. This last metric was up an impressive 241% from the previous quarter.

The company’s solid financial results are accompanied by a 10% increase in the share price since the beginning of the year. That’s a significant outperformance compared to the S&P’s 16% decline over the same time period.

Covering this stock for BMO Capital, analyst Kelly Bania believes Chefs’ Warehouse is on the upside. She wrote of its outlook: “We continue to view CHEF as an attractive small-cap stock with further upside, not only in Q4, where we see guidance as conservative, but also over the longer term, with given CHEF’s strong performance and long track record for continued growth. .. CHEF continues to perform well against its longer-term objectives and the strong year-to-date performance should continue to further help investors gain comfort in valuing CHEF based on its full earnings potential.”

Bania’s analysis has her rate the stock as Outperform (i.e. Buy), and her price target of $48 implies a one-year gain of ~31%. (To watch Bania’s record, Press here)

Overall, the Street seems to agree with BMO. CHEF stock has 5 recent analyst reviews, but all of them are positive – giving the stock a consensus rating of Strong Buy. Shares are trading at $36.72, and the average price target of $48 is the same as Bania’s. (Check out the CHEF stock forecast at TipRanks)

Clean ports (CLH)

We will now shift our gears to the environment and industrial services sector. The industry’s push toward cleaner operations has social tailwinds behind it, and that push has sent Clean Harbors shares up 18% this year.

The company itself helped with a solid performance – and the provision of a wide range of services. These include waste disposal, recycling, packaging and distribution of chemicals and disposal of household hazardous waste. In addition, Clean Harbors offers a variety of specialty industrial services such as daylighting and hydro-excavation and emergency response. The company even offers accommodation and surface rental in the oil and gas sector.

All this gave the company solid revenue in the latest 3Q22, with the top line reaching $1.36 billion, up 43% year-over-year. The company reported net income of $135.8 million and adjusted earnings per share of $2.43. Net income showed an increase of $70 million over 3Q21, while the EPS number was up 113% from the year-ago quarter.

All of this is happening as the company prepares for succession. Founder and CEO Alan McKim is stepping down and will be replaced by two long-time executives, COO Eric Gerstenberg and CFO Michael Battles, as co-CEOs. Such a shake-up might worry Street analysts, but Baird’s David Mantywhich holds a 5-star rating from TipRanks while expressing “reservations about a co-CEO setup,” also says, “We have a great deal of comfort in the operational/strategic capabilities of both executives…”

Coming to the company’s position, Manthey wrote, “3Q22 featured a higher ES price/mix and continued operating efficiencies leading to sharply higher margins… We see a good setup for continued stable pricing and deferred waste streams that may moderate the results, while PFAS/reattachment/increased sales of blended oils could also broaden our view.”

“On net,” Manti summarized, “we see good upside potential as CLH trades at just 8x EV/2024E EBITDA on our recessionary estimates – the very low end of the historical NTM trading range.”

This top analyst doesn’t stop with optimistic commentary; he also gives the stock an Outperform rating (i.e., Buy) and a $155 price target to indicate potential for ~34% stock gains over the next year. (To watch Manthey’s record, Press here)

Overall, the consensus Strong Buy rating for this stock is based on 5 recent analyst reviews, dividing 4 to 1 in favor of Buy over Hold. With a share price of $115.56 and an average target price of $143, the stock has a potential upside of ~24% over the next 12 months. (Check out the CLH stock forecast at TipRanks)

To find good stock trading ideas at attractive valuations, visit TipRanks’ The best stocks to buya tool that brings together all of TipRanks equity insights.

Rebuttal: 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.

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