3 Top Jefferies New Growth Stocks to Buy With Big Upside Potential

By Lee Jackson Updated Jul 6, 11:42AM EDT · Published Jul 6, 9:10AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The third quarter is now underway, and with earnings season starting this week analysts will be closely monitoring reports from companies to see how business was in the second quarter. With a ton of companies reporting over the next three weeks, and the markets definitely expecting the worst from Greece, stocks investors need to tread carefully when looking for new ideas. Some analysts on Wall Street are aggressively touting energy stocks.

A new report from Jefferies highlights the firm’s top growth stocks to buy. Two are new initiations and could make good sense for aggressive investors with capital to put to work in search of fresh ideas.

Anacor Pharmaceuticals

Anacor Pharmaceuticals Inc. (NASDAQ: ANAC) is a biopharmaceutical company focused on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. Anacor’s first approved drug, Kerydin (tavaborole) topical solution, 5%, is an oxaborole antifungal approved by the U.S. Food and Drug Administration in July 2014 for the topical treatment of onychomycosis of the toenails. In July 2014, Anacor entered into an exclusive agreement with Sandoz, a Novartis company, pursuant to which PharmaDerm, the branded dermatology division of Sandoz, distributes and commercializes Kerydin in the United States.

ALSO READ: 4 Utilities Deutsche Bank Loves for Their High Yields

Anacor’s lead product development candidate is AN2728, an investigational non-steroidal topical PDE-4 inhibitor for the potential treatment of mild-to-moderate atopic dermatitis and psoriasis. Beyond Kerydin and AN2728, Anacor has discovered three investigational compounds that it has out-licensed for further development.

The analysts feel that the potential value that could be awarded to AN2728 given updated pricing assumptions and various net sales forecasts is huge. Their analysis suggests that if the drug achieves $1 billion in peak sales, shares of Anacor could be worth $100 or more. With Phase 3 data due out next month, the potential for investors is huge if the data is positive.

The Jefferies price target for the stock is raised from $70 to $80. The Thomson/First Call consensus price target is $75. The stock closed trading most recently at $78.59.
Organovo

This stock is initiated at a Buy rating and slipped recently as a result of a secondary stock offering. Organovo Holdings Inc. (NYSEMKT: ONVO) designs and creates functional, three-dimensional human tissues for medical research and therapeutic applications. The company develops 3D human disease models through internal development and in collaboration with pharmaceutical and academic partners. Organovo believes these 3D human tissues have the potential to accelerate the drug discovery process, enabling treatments to be developed faster and at lower cost.

The Jefferies analysts feel that the company’s 3D printed human tissues offer clear advantages over current traditional methods for drug discovery and toxicology testing. They report that Organovo’s first commercial products for the liver uptake has been positive and they have been getting solid interest from top major pharmaceutical companies in recent years. The analysts also think that the liver and kidney could each be $100 million plus products on very minimal penetration.

ALSO READ: The Best and Worst Performing Stocks of 2015

The Jefferies price target for this very interesting but very aggressive stock is $5, and the consensus is posted at $5.33. Shares ended last week at $3.74.

TEGNA

This company is the broadcasting and digital business of the former Gannett. TEGNA Inc. (NYSE: TGNA) spun off the publishing unit of the company to shareholders, which will continue to be called Gannett, and includes such properties as the well-known USA Today newspaper. Gannett now provides content through the flagship USA Today and will also include 92 local U.S. daily publications. TEGNA continues to own and service 46 television stations and its digital business consists of several other well-positioned and growing online companies such as Cars.com and CareerBuilder, among others.

The Jefferies analyst feel the after spinning off the publishing business, the company is in a tremendous position versus peers as they see the marriage of the broadcasting and the digital segment offering high-growth potential and outstanding free cash flow. They also highlight political ad spending next year as a huge positive for earnings with the company’s presence in six key swing states.

TEGNA investors are paid a solid 2.52% dividend. The Jefferies price target for the stock is $35, and the consensus is at $37.38. Shares closed at $31.75.

ALSO READ: 5 Oil and Gas Stocks Analysts Want You to Buy Now

The Jefferies growth calls are very aggressive and are only for accounts that are styled that way. However, they also have big upside potential and could be trading much higher than current targets if all the current potential is met or exceeded.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.