With the market pursuing its usual roller-coaster course, volatility has started to spike recently. While the VIX index, which measures option volatility, ended lower on Friday, it is still way below highs earlier this year and the big spike last fall. Investors looking for growth ideas may want to look away from momentum, and Jefferies has three very solid ideas for this week.
The Jefferies team initiates two new stocks with a Buy rating and a third will report earnings after the closing bell Monday. Those less adventurous may want to see just how those numbers come in, while others may want to buy stock in front of the announcement.
Bojangles’
This company had a recent well-received initial public offering (IPO), and the Jefferies team initiates the stock with a rating of Buy. Bojangles’ Inc. (NASDAQ: BOJA) is a self-described, highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from Southern recipes. Founded in 1977 in Charlotte, N.C., Bojangles’ serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin’s and Legendary Iced Tea. As of March 29, 2015, Bojangles’ had 258 company-operated and 377 franchised restaurants, primarily located in the southeastern United States.
According to the Jefferies report, “Bojangles’ has a strong people and service culture that should help the brand perform going forward.” The company has seen average unit growth of $1.8 million with more than 20% restaurant level margins. In recent years, Bojangles’ has witnessed unit growth of 7% to 8%, and the Jefferies team expects this growth to continue.
The Jefferies price target for the stock is an aggressive $32. The Thomson/First Call consensus figure was not yet available. The shares closed Friday at $24.51. The company will report earnings on Thursday June 11 after the close.
ALSO READ: Credit Suisse Adds 4 Stocks to Prestigious Top Picks List
Collegium Pharmaceutical
This specialty pharmaceutical company is another recent IPO that the Jefferies analysts like. Collegium Pharmaceutical Inc. (NASDAQ: COLL) is focused on developing a portfolio of products that incorporate its patent-protected DETERx technology platform for the treatment of chronic pain. The DETERx oral drug delivery technology is designed to provide extended-release delivery, unique abuse-deterrent properties and flexible dose administration options. The new drug application, or NDA, filing for Xtampza, the company’s lead product candidate, was accepted by the FDA on February 10, 2015. The FDA set a Prescription Drug User Fee Act (PDUFA) goal date of October 12, 2015, for completion of its review of the Xtampza NDA.
The Jefferies team points out the FDA has been very focused on abuse deterrent painkillers, and there are only four currently approved with abuse deterrent claims. They say that Collegium’s drug has even more abuse resistance qualities than other drugs and may also serve the 11 million pain patients who have difficulty swallowing.
The Jefferies price target for the stock is started at $20, and again, because of the recent IPO, there is no consensus target posted. The shares closed Friday at $19.08.
ALSO READ: Baird Adds New Top Stocks to Buy to Its Focus List
United Natural Foods
This is one of the top natural foods companies. United Natural Foods Inc. (NASDAQ: UNFI) carries and distributes more than 80,000 products to more than 40,000 customer locations throughout the United States and Canada. The company serves a wide variety of retail formats, including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. The company was ranked by Forbes Magazine in 2014 as one of “America’s Best Managed Companies.
Because the company sells to thousands of retail locations and sells literally tens of thousands of different products, it has less specific retailer or supplier mix. This has been an attractive feature over the years for investors who believe in the long-term growth of natural foods, but are unsure about which retailers or suppliers will ultimately win.
The Jefferies team is cautious on the upcoming numbers, so investors may want to see how the data are. That said, they are still very positive for the demand for organics and they expect sales to rebuild back to 13% to 14% by the company’s fiscal 2017.
The Jefferies price target for the stock is an aggressive $90, while the consensus is much lower at $80.94. The stock closed on Friday at $63.88, down almost 3% on the day.
ALSO READ: 4 Tech Stocks That Could Rocket Higher on a Short Squeeze
These ideas are good aggressive stocks to buy for investors looking to add companies that are not the proverbial “overcrowded” stocks. The fact that two had recent IPOs makes them suitable only for accounts with a high risk tolerance.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
