[cnxvideo id=”655426″ placement=”ros”]One of the best market conditions for active traders is one where price momentum underperforms and then kicks back in with a vengeance, and given what we have experienced since the second quarter started, that could be a scenario we are about to enter. The market has been putting in a grinding, sideways move since March 1st, and may be getting ready for a jump higher, especially if earnings continue to pick up like they did in the first quarter.
We screened the Jefferies top stock calls for this week and found four that fit the bill perfectly as momentum candidates that could be set for a significant move higher. All are rated Buy and are more suited for aggressive growth accounts.
The huge social media leader has consistently posted gigantic numbers and did yet again in the first quarter. Facebook Inc. (NASDAQ: FB) operates as a mobile application and website that enables people to connect, share, discover, and communicate each other on mobile devices and personal computers worldwide.
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The company’s solutions also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile and web on various platforms and devices, which enable people to reach others instantly, as well as enable businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.
Top analysts feel that Facebook’s long-term forecasts are more easily attainable, especially as the company continues to grow and employ new platforms for online advertising. The Jefferies team noted this in their report:
The Company reported last week and posted a big revenue and earnings-per-share beat as fears over rising expenses did not materialize. Stock was down small following the print on high expectations and the move to GAAP EPS. Mobile ad revenue grew 57% Year-over-year, ahead of the Street and the company’s average revenue per user in the US/Canada rose 38% year-over-year. Management reiterated 40-50% expense growth guidance and we’re at the low end of that given prior conservatism.
The Jefferies price target for the technology juggernaut is posted at $192, and the Wall Street consensus is set at $162.72. The share closed Friday at $150.24.
Fleetcor Technologies
This top business service company also reported solid earnings last week. Fleetcor Technologies Inc. (NYSE: FLT) provides fuel cards, commercial payment and data solutions, stored value solutions, and workforce payment products and services. The company sells a range of customized fleet and lodging payment programs; and offers card products to purchase fuel, lodging, food, toll, transportation, and related products and services at participating locations.
The company also offers telematics solution that allows fleet operators to monitor the capacity utilization and movement of vehicles and drivers; vehicle maintenance services; prepaid fuel and food vouchers, and cards; and workforce payment product related to public transportation and toll vouchers.
In addition, it provides proprietary equipment that reduces unauthorized and fraudulent transactions to over-the-road trucking fleets, shipping fleets, and other operators of heavily industrialized equipment, including sea-going vessels, mining equipment, agricultural equipment, and locomotives.
The analysts noted this in the report:
Management provided a detailed rebuttal of the recent bear claims on the call noting total fee revenue exposure of 13% of revenues versus the bears’ claims for ~55% and noted that account holders of fleet card collectively save $1 billion annually on fuel discounting and incentives. Additionally, they cited a client retention rate of 90%+. And the company announced the acquisition of Cambridge Global Payments for $675 million, which is expected to add $.05 to earnings-per-share in 2017
The Jefferies price target is posted at a towering $197, and the consensus is at $184.50. The shares closed Friday at $122.40.
Monster Beverage
This company is a top consumer discretionary stock that the Jefferies team has liked for some time. Monster Beverage Corp. (NASDAQ: MNST) is an alternate beverage company focusing primarily on the energy drink segment. Approximately 75% of sales are in the United States and the company has two primary operating segments, finished goods and concentrates.
The Coca-Cola Company (NYSE: KO) owns 16.7% of the company and is the primary U.S. distributor, which gives Monster Beverage access to the company’s distribution system in international markets. Monster Beverage reported mixed results, but the analyst said this in the Jefferies research note:
The Company reported last week. Organic sales growth of 9.5% was peer leading, and we estimate 15% April growth on a comparable basis. We believe investors will look past modest first quarter revenue shortfall with April off to a very strong start. Stock trades at a 16% premium to Coke and Pepsi, we believe it can re-rate to a 35% premium.
The Jefferies price target for the shares is $63, and the consensus is set at $55.29. The stocks closed trading last Friday at $47.45.
Neurocrine Biosciences
This company is partnering with a top big pharmaceutical company, and the data has been very solid. Neurocrine Biosciences Inc.(NASDAQ: NBIX)is a biopharma company focused on developing and commercializing therapies for neurological and endocrine disorders. The company’s lead asset is Ingrezza, approved for the treatment of tardive dyskinesia (TD) and in development for the treatment of Tourette syndrome. NBIX is also partnered with AbbVie on elagolix, in development for the treatment of endometriosis and uterine fibroids, and is developing opicapone as an adjunct therapy for Parkinson’s disease.
The Jefferies team has been bullish on the company for some time and noted this in the report:
Results show anticipated uptake for the company’s Ingressa and TEVA’s Austedo in moderate to severe TD, but preference has swung towards the Neurocrine offering since our last survey, partially due to the lower price point. Following these results, we took up our 2019-2023 revenue estimates for TD and are now 30% above consensus.
The Jefferies price target for the company is $67, and the consensus is posted at $70. The shares closed last Friday at $53.74.
Four stocks that make very good sense for aggressive accounts looking for ideas. Given that we are in May, and traditionally summer trading is slower, it may make sense to buy some partial positions and see how the rest of the month goes.
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