As we approach the final stretch of 2022, with less than three weeks until we turn the page on 2023, markets and the economy are sending out a series of mixed signals. Stocks have stabilized somewhat over the past month, with volatility lower compared to the previous six months. At the same time, investors should consider the economic signals — especially persistently high inflation and uncertainty about the Federal Reserve’s interest rate decision this week. It is a difficult environment for making stock decisions.
What is needed here is a simple tool that can cut through the noise and give an easy-to-read, data-driven tag on any given stock. This is where TipRanks comes in Smart Score It comes in, an analytical tool that takes a stream of raw market data and breaks it down by a series of 8 easily identifiable factors, each known to match it with outperformance in the future. Combined and distilled into a single-digit score, these factors give a useful indication of each stock. The Smart Score rating comes on a scale of 1 to 10, with 10 Perfect being the highest and clearest mark for investors.
A select few stocks will receive a “perfect 10” score, the highest rating of the smart class. Is this the right fit for your wallet? According to the algorithms, they tick all the boxes for next year’s winnings; We’ve gathered details on three of them to find out what makes them tick. Here they are, along with comments from Street’s analysts.
We’ll start in the tech world where HubSpot is a well-known name in online inbound marketing, with a reputation as an innovator in the field. HubSpot offers its clients – social media experts, CRM experts, content managers and SEO optimizers – with a robust suite of web analytics products, using a freemium model. Under this model, basic services are available to users for free, with higher-level options and upgrades available as paid subscriptions.
The HubSpot software is available in six languages, and is used in more than 120 countries by more than 158,000 paying customers. This metric comes from our Q3 ’22 financial results, and represents an increase of 24% year-over-year. The company’s subscription model is profitable, and HubSpot brought in more than $11,000, on average, in subscription revenue per customer in the third quarter, up 7% from the year-ago period. Total revenue in Q3 ’22 was reported at $444 million, up 31% year-over-year. Subscription revenue accounted for $435 million of that total, up 32% from Q3 ’21.
In terms of earnings, the company has reported both pros and cons. Under GAAP terms, HubSpot reported a quarterly net loss of $31.4 million, or 65 per share. This was much deeper than the GAAP net loss recorded in the third quarter of ’21. On the other hand, in the non-GAAP numbers, net income was positive, at $35.1 million, or 69 cents. per diluted share, which is an increase of 37% in net profit and 38% in diluted earnings per share.
However, the stock, like many others, has taken a hit this year, and shares are now trading at a 56% discount from the price at the start of 2022.
This could be an opportunity, according to the thesis put forth by the Credit Suisse analyst Rich Hilliker.
“We believe HubSpot is positioning itself as a leader in front and middle office software, and that its value-led growth strategy resonates strongly with customers at all stages of their lifecycle, leading to further standardization and ultimately expansion… We believe the combination of From thoughtful, diligent, and continuous product development, coupled with a natural well-paid to conversion-driven conversion drive, it resulted in a highly compelling product and a value-based growth algorithm that keeps customers hooked on positions,” Hilliker said.
To that end, Hilliker rates HUBS an outperformer (i.e. a buy), with a price target of $400 meaning a one-year profit of 37%. (To watch Hilliker’s track record, click here)
In general, technology companies like HubSpot are never short of analyst interest, and HUBS stock has 21 recent analyst reviews on record. The score collapses from 19 to 2 in favor of Buys on hold for a Strong Buy consensus rating. With a trading price of $291.38 and an average price target of $380.38, the stock boasts an upside potential of approximately 31%. (See HUBS stock analysis on TipRanks)
The next “top ten” stock we’re looking for is Vaxcyte, a biotechnology company involved in vaccine research, working on preventive vaccines against a range of serious bacterial infections, including pneumococcal disease, group A streptococcus, and periodontitis. The company’s research tracks are based on Vaxcyte’s cell-free protein manufacturing platform, XpressCF, and the goal is to create vaccines featuring distinct antigens and protein transporters – the building blocks essential to vax’s efficacy.
The company’s research pipeline currently features four tracks, three of which are currently in preclinical stages. A fourth, VAX-24, is under development as a preventative for invasive pneumococcal disease and pneumonia. VAX-24 is a 24-valent conjugate vaccine (PCV), and the data released at the end of October was very positive, achieving several milestones. Preliminary data from the Phase 1/2 proof-of-concept study showed positive results on safety, tolerability, and immunogenicity at all doses, and provided support for the company to move forward with a Phase 3 trial based on the 2.2 mcg dose. The study was conducted on healthy adults between the ages of 18 and 64. Looking ahead, Vaxcyte plans regulatory discussions for: a Phase 3 trial during 2H23, and expects Phase 3 data to be available in 2025.
The market’s reaction to the data release shows why biotech stocks are wild with investors — shares jumped 60% in one day, and are now trading at almost double their Oct. 20 valuation.
Vaxcyte took advantage of the jump in the share price to make a public offering of shares. The company put 17,812,500 shares of common stock on the market, at $32 each, and with insurance options fully subscribed, generated $690 million in total proceeds from the sale.
Looking ahead, BTIG Analyst Thomas Schrader He sees a lot of strength in the company’s pipeline and potential addressable market. He writes, “The company’s vaccines appear poised to become best-in-class in the nearly $40 billion infectious disease vaccine market…Most of the stock’s current value is based on the VAX-24 and P1/latest flagship program. 2 reading makes the vaccine poised to be BIC is in this $7 billion market that could double in the next decade…”
“It is difficult to imagine a stronger reading than the recent P1/2 data for VAX-24 where all three doses show a profile likely to support approval, and all three doses show an AE profile essentially identical to less effective but already approved vaccines,” Shrader added.
Shrader adds a buy rating to his commentary on Vaxcyte, and completes his bullish stance with a $69 price target, indicating his confidence in an upside of about 63% for the next 12 months. (To watch Schrader’s log, click here)
Overall, Vaxcyte has earned 4 recent analyst reviews, all of which are positive – making our Strong Buy consensus rating unanimous. Shares last closed at $42.39 and had an average price target of 61.75, which would mean an upside of nearly 46% by the end of next year. (See PCVX stock analysis on TipRanks)
Many individuals are born with disorders for which there is no cure, or for which there are few treatments to improve their quality of life. However, with gene therapy, it is said that entire diseases can be eradicated after just one treatment that targets their source.
The next stock, Rocket Pharma, is a gene therapy company involved in developing new therapies for severe diseases with “high unmet medical needs.” The company uses gene therapy methods to adapt viruses as delivery systems, capable of inserting new genetic information directly into disease-affected cells, replacing incorrect or damaged genes, and altering the cell at both the genetic and molecular levels to reduce the onset of disease. These therapies potentially offer the possibility of targeted disease cure, rather than palliative care.
The company’s pipeline features active programs working on gene therapies for several terminal cancers and severe pediatric conditions. Targeted diseases include Danon’s disease, Fanconi anemia (FA), leukocyte adhesion deficiency (LAD-I), and pyruvate kinase deficiency (PKD), and the company is working through the viral vector (AAV) and lentiviral vector (LVV) pathways to create agent delivery systems. Gene therapy.
Based on recent strong clinical findings, Rocket expects to file regulatory filings on both the LAD-I and FA pathways during 2023. It is planned to file LAD-I in 1H23, and deposit FA in 2H23. Clinical data on both tracks must be submitted before the end of this year.
In other clinical updates, Rocket has reported positive results from its Phase 1 clinical trial of RP-A501 against Danon’s disease. The study showed that the drug candidate gave a lasting curative effect and that pediatric and adult patients showed 9 to 36 months of disease improvement. The candidate drug was also well tolerated. The company has designed the pivotal Phase II study, and is working with the Food and Drug Administration to seek regulatory comment.
While all of that was going on, Rocket also moved to expand its AAV-based gene therapy program in cardiovascular disease through Obsession from Renovacor. The move gives Rocket ownership of Renovacor’s pipeline of AAV-based gene therapy products. The terms of the merger were done in all shares, and Renovacor shares ceased trading on December 1.
Rocket shares fell in May of this year, but have since gained 139%. To date, Canaccord analyst Whitney Eggim He sees the company in a strong position to continue its winning streak.
“We continue to believe that RCKT shares represent a unique opportunity in the gene therapy space. We like the company’s differentiated gene therapy pipeline… The late-stage pipeline provides a line of sight to commercialization of both RP-L201 and RP-L102, with BLA+MAA filings expected.” in 1H23 and 2H23, respectively.In the meantime, RCKT’s early-stage pipeline should continue to deliver clinical stimuli in the near to medium term.In addition, we expect additions to the pipeline — named “Wave 2” in 2023 – More assessment and stimulating side of the story.”
These comments support Ijem’s Buy rating, and its price target of $49, indicates a 157% upside potential for the coming year. (To see Ijem’s track record, click here)
The bulls are definitely running for the RCKT; The stock has 11 recent analyst reviews, all of which are positive — for a consensus rating of Strong Buy. The stock is priced at $19, and its average price target of $54.90 is more bullish in Canaccord’s view, implying a profit of roughly 187% in the next 12 months. (See RCKT stock analysis on TipRanks)
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.
Stock, bond and cryptocurrency investors remain on edge after a rough year for the markets
3 weeks ago
December 30, 2022
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Dow Jones losses are heading towards the closing bell as US stocks approach their worst year since 2008
3 weeks ago
December 30, 2022
US stocks were trimming losses heading towards the closing bell on Friday, but were still on track to post their worst annual loss since 2008, as the harvest of tax losses combined with concern over the outlook for US corporate and consumer earnings took its toll.
It fell nearly 26 points, or 0.7%, to about 3,824.
The Nasdaq Composite Index fell 72 points, or 0.7%, to about 10,406 points.
Stocks posted their biggest gains of the month on Thursday, with the Dow Jones rising 345 points, or 1.05%, to 33,221 as major stock indexes rebounded after losses incurred earlier in the week that pushed the Nasdaq Composite to a new closing low for the year. . The S&P 500 was on track on Friday to wrap up its fourth consecutive losing week, the longest streak of weekly losses since May, according to FactSet data.
What drives the markets
US stocks traded lower on Friday afternoon, on pace to close the last trading session of 2022 with weekly and monthly losses.
Stocks and bonds have been crushed this year as the Federal Reserve raised its benchmark interest rate more aggressively than many expected, as it sought to crush the worst inflation in four decades. The S&P 500 is on track to end the year with a loss of nearly 20%, its worst annual performance since 2008.
“Investors were on edge,” Mark Heppenstahl, chief investment officer at Penn Mutual Asset Management, said in a phone interview Friday. “It seems as if being able to bring prices down might be a little easier given how bad the year has been.”
Stock indices have fallen in recent weeks as the recent rally inspired by hopes in the Fed’s policy focus faded in December after the central bank indicated it would likely wait until 2024 to cut interest rates.
On the last day of the trading year, the markets were also hit by selling to capture losses that could be written off from tax bills, a practice known as tax harvesting, according to Kim Forrest, chief investment officer at Bouquet Capital Partners. .
Forrest added that an uncertain outlook for 2023 has also weighed in, as investors worry about the strength of corporate earnings, the US economy and consumer as the fourth-quarter earnings season approaches early next year.
“I think the Fed, and then earnings in mid-January — they’ll set the tone for the next six months. Until then, it’s anyone’s guess.”
The US central bank has raised its benchmark interest rate by more than four percentage points since the start of the year, pushing borrowing costs to their highest levels since 2007.
The timing of the first Fed rate cut will likely have a significant impact on markets, according to Forrest, but the outlook remains uncertain, even as the Fed tries to signal that it plans to keep interest rates higher for longer.
On the economic data front, the Chicago PMI for December, the latest major data release for the year, Came stronger than expected. Climbing to 44.9 from 37.2 in the previous month. Readings below 50 indicate contraction.
In the coming year, Heppenstahl said, “we are likely to shift toward concerns about economic growth rather than inflation.” “I think the decline in growth will eventually lead to an even greater drop in inflation.”
Eric Sterner, chief information officer at Apollon Wealth Management, said in a phone interview on Friday that he expects the US to fall into a recession next year and that the stock market could see a new bottom as companies likely review their earnings. “I think the earnings outlook for 2023 is still very high,” he said.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all on pace Friday afternoon posting weekly losses of around 1%, according to FactSet data, at last check. For the month, the Dow was down about 5%, the S&P 500 was down about 7% and the Nasdaq was about to crash down about 10%.
It rose about four basis points on Friday at 3.88%, according to FactSet data, in the latest check. Ten-year yields jumped about 2.34 percentage points this year through Thursday, on track for the biggest annual gain ever based on data going back to 1977, according to market data from Dow Jones.
Up about 3.64 percentage points in 2022 through Thursday to 4.368%, 30-year return TMUBMUSD30Y, 3.971%
It jumped 2.03 percentage points over the same period to 3.922%. That marks the largest increase in a calendar year for each based on data going back to 1973, according to market data from Dow Jones.
Outside the US, European stocks capped their biggest percentage drop in a calendar year since 2018, with the Stoxx Europe 600 xxxp, -1.27%And the
It is an index of euro-denominated stocks, down 12.9%, according to market data from Dow Jones.
NEW YORK (Reuters) – A key facility used by the Federal Reserve to help control short-term interest rates saw record inflows on Friday, the last trading day of the year.
The New York Fed said its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms, beating the previous high seen on Sept. 30, when inflows totaled $2.426 trillion.
The cash rally was almost certainly tipping into record territory in the usual end-of-quarter pattern that could worsen further towards the end of the year. On those dates, for a variety of reasons, many financial firms prefer to deposit money in the central bank rather than in the private markets.
The Fed’s reverse repo facility has been very active for some time. After seeing almost no absorption for a long time, money began to gravitate toward the central bank in the spring of 2021 and then grew steadily. Daily reverse repo usage has been steadily above the $2 trillion mark since June.
The reverse repo facility takes cash from qualified financial firms in what is an actual loan from the Federal Reserve. The current rate is 4.3%, a yield that is often better than rates for short-term private sector lending.
The reverse repo facility is designed to provide a soft floor for short-term rates and the federal funds target rate, and is the Fed’s primary tool for achieving its function and inflationary mandates. To mark the higher end of the range, the Fed is also pushing deposit-taking banks to deposit cash at the central bank, where the interest rate on reserve balances is now 4.4%.
The federal funds rate is currently set between 4.25% and 4.5% and is trading at 4.33% as of Friday, sandwiched between the reverse repo rate and interest on reserve balances.
There are no signs of shrinkage
Even with the heavy use of reverse repo, Fed officials have always remained unconcerned about large outflows, even as some in financial markets worried about the potential for the Fed to drain the borrowing and lending lives of private money markets.
Fed officials also expected that as the central bank continues to raise interest rates with the goal of bringing down very high levels of inflation, the use of the reverse repo facility should decrease. But that hasn’t happened yet, and some in the markets now believe that the consistently high utilization of the Fed facility will be around for some time to come.
Research by the Federal Reserve Bank of New York indicated that banking regulation issues make demand for the Fed’s reverse repo instrument high. Meanwhile, the Kansas City Fed added its view that large inflows are related to limited private market investment opportunities and policy uncertainty.
Strong cash flows to the central bank may not have alarmed central banks, but they have driven their operations to an actual loss. The Federal Reserve finances itself through interest on the bonds it owns as well as the services it provides to the financial community. It usually makes a noticeable profit and by law returns it to the treasury.
Currently, the cost of paying interest on reverse repo agreements and reserve balances outweighs income. The Fed reported Thursday that as of Dec. 28, the accounting metric it uses to track losses was $18 billion. Many observers expect that the Fed’s plans to raise interest rates further and keep them at high levels will mean fairly large losses for the central bank over time, even if these losses will not affect the action of the Fed’s monetary policy.