It has been a tough few months for all financial markets as assets have suffered from tough government policies to combat rising inflation in many parts of the world. Investors have had to deal with bearish conditions and hope that things change in due time. Interestingly, nothing appeals to investors in these market conditions like the possibility of a change in market sentiment. Some experts, such as Ari Wald, Oppenheimer’s head of technical analysis, seem to believe this is the case.
Wald’s analysis shows that September’s weakness marks a final leg lower in the bear cycle and a bullish opportunity for long-term investors. Before adding that in the post-war era, most bear cycles have been “long-and-shallow or short-and-sharp.” Thus, there have been only four long-and-deep declines in 1968, 1973, 2000, and 2007. Other than that, market conditions are now stronger than in those particular periods.
With that in mind, most individuals might wonder what the best indices to trade are. Oppenheimer analysts have identified two stocks that might appeal to most investors in this period. The section below will cover them in detail.
IDEAYA Biosciences (IDYA)
This medical company focuses on synthetic lethality that aims to discover and develop targeted oncology drugs for patient populations identified with molecular diagnostics. To identify the patient populations most likely to benefit from its medicines, the company conducts research to identify and validate translational biomarkers with small molecule drug discovery. So far, the company has several drugs in pre-clinical development and two in clinical trials.
There is a market opportunity for darovasertib, a protein kinase C (PKC) inhibitor, and IDE397, a therapy for patients with methylthioadenosine phosphorylase (MTAP)deletion. According to Matthew Biegler, an Oppenheimer analyst, these advancements make the IDYA stock so promising. Therefore, he thinks strong data coupled with regulatory guidance can help win over lingering skeptics.
Based on the findings, Biegler rates the IDYA stock as a buy backed by a $22 price target. For investors that get in now, they stand to realize returns of over 134%. Four other analysts share these sentiments at Oppenheimer, except one making the general consensus a strong buy. The forecast calls for one-year gains of 94%, considering the average price target clocks in at $18.20.
HashiCorp (HCP)
This cloud automation software provider provides open-source tools that integrate with and expand upon the services provided by public cloud service providers like Amazon and Microsoft. The company has nine different products that serve the different segments of the cloud infrastructure industry. Some popular ones are Vault, which handles password management, and Terraform configures infrastructure. These products are in tune with the trend, with more enterprises preferring to use cloud providers with the ongoing digital transformation.
The company is quite young on public markets. It held its IPO last December, where its market cap stood at around $14 billion. However, the valuation is down 63% following the onset of the bear market. Still, poor stock performance hasn’t stopped the company from delivering strong quarterly results, as was the case in the recently delivered second quarter of the fiscal 2021 July statement.
Its revenue reached $113.9 million, $11.56 million more than Wall Street expected. The figure amounted to a year-over-year increase of over 52%. Taking a deeper look at the company books, the performance has been boosted by growth in sales from clients with more than $100,000 in ARR (annual recurring revenue) and a record YoY 134% uptick in NDRR (net dollar retention rate). Non-GAAP EPS of -$0.17 handily beat the street’s -$0.31 forecast. For the 3rd quarter, the company expects revenues between $110 – $112 million compared to consensus expectations of $106.48 million.
Ittai Kidron is full of praise for the company’s performance despite being in the face of “macro headwinds.” It’s such results that have analysts at Oppenheimer excited. The analyst calls the company stock a buy with a price target of $50, which suggests the shares have a 66% growth over the next year.
Many analysts believe the bear market might be on its last legs. Therefore, it does make sense to anticipate a market rally soon. Due diligence is required to guarantee you make the best choices when choosing stocks with the most potential for gains. Above are two stocks you can keep an eye on as you compile potential earners.
