When multiple analysts have a favorable opinion on a stock it can be an overwhelming buy signal. Although it doesn't mean the investment doesn't have its risk factors, a green light from an army of Wall Street firms generally means the company has a very bright outlook.
It won't come as a surprise that several mega-cap technology stocks like Amazon, Microsoft, and Google all have the full support of the Street. But digging deeper into the large-cap space reveals some interesting names that sell-side analysts have wholeheartedly agreed are 'buys'.
What is Driving Growth at Thermo Fisher Scientific?
All 14 analysts that have offered an opinion on Thermo Fisher Scientific (NYSE:TMO) in the last three months have called the stock a 'buy'. Last week, KeyBanc, a rare holdout, upgraded it from 'neutral' making the bullish sentiment unanimous. Even the lowest analyst price target ($523) suggests 16% upside, while the highest ($600) points to 33% upside potential.
It's easy to see why Thermo Fisher Scientific is so well-liked on the Street. The company is benefitting from high demand for its scientific instruments and consumables from the companies involved in COVID-19 testing, treatment, and vaccine development. Sales to pharmaceutical companies, hospitals, diagnostic labs, and research institutions have been through the roof and aren't likely to slow down much. Even as pandemic conditions improve, demand for lab equipment and chemical reagents should stay strong with the world spotlight now on the prevention and treatment of infectious diseases.
Thermo Fisher is forecasting bottom line growth around 50% this year. The company is capitalizing on the current environment by using its cash hoard to invest in new technology, products, and manufacturing capabilities. This should allow it to build off its recent success by expanding its customer base and product lineup. Its also conceivable that Thermo Fisher makes another complimentary acquisition to further expand its market opportunities. Given the track record of successful M&A and growth prospects, the 24x forward P/E is a price well worth paying.
Why is General Motors Stock Up?
A few years ago it would've been hard to imagine General Motors (NYSE:GM) as a consensus buy, but it is exactly that. Last week Morgan Stanley became the latest firm to call the stock a 'buy'. Its bullish commentary centered around the strength of GM's management team and the potential of its growth strategy.
Twelve years removed from bankruptcy, the legendary U.S. automaker is a different animal these days. It has a stronger brand portfolio that includes stalwarts like Buick, Cadillac, and Chevrolet along with some internationally-focused brands like Daewoo, Jiefang, and Wuling. In fact, in stark contrast to its domestic roots, General Motors' largest market today is China, the world's biggest auto market since 2009. Despite the pandemic headwinds, new vehicle sales slipped just 2% last year in China and are poised for a rebound in 2021.
Not only is modern-day General Motors more diversified in terms of geography but by product line as well. Much of the excitement around the stock relates to the company's expansion into electric vehicles and self-driving cars which are undoubtedly where the industry is headed. These growth areas along with GM's high margin gas engine vehicle business are expected to drive some strong performances similar to what we saw in the fourth quarter.
Shares of GM have tripled off their March 2020 bottom and are trading near a record high—but may find another gear. The company's financials aren't what they were a decade today with GM now boasting one of the strongest balance sheets in the industry. Despite the recent run, General Motors is trading below its historical valuation ratios including a 0.6 price-to-sales ratio. An improving global auto industry backdrop, strength in China, and a more diverse growth profile (and analyst support) suggest investors should be taking General Motors stock for a test drive.
Is Zoetis Stock a Buy?
Switching gears back to health care, Zoetis (NYSE:ZTS) has long been one of the most favored large cap growth stocks. The animal health company has built up a nice track record since spinning off from Pfizer nearly a decade ago amid increased attention on both food source safety and pet care.
A lesser-known S&P 500 member, Zoetis develops a range of medicines and vaccines for livestock (such as cattle, chickens, pigs, and fish) and pets which it then sells worldwide. The animal health market is a good place to be in these days and Zoetis has a leadership position.
As far as pets, people have perhaps never been so attached to their furry friends as during the pandemic. That has translated to increased spending on not only pet food and squeaky toys, but medicines and vaccinations. Pet owners want their pets around and are more willing to pay for things like arthritis treatments for dogs and cats.
The tailwinds have been just as beneficial on the livestock side of the business with the COVID-19 outbreak putting the spotlight on feedstock treatment and food safety. Amid increased regulatory scrutiny worldwide, food companies like poultry farmers are spending more on Zoetis medicines and vaccines to ensure the safety of our food supply.
Zoetis is a well-balanced growth machine that derives roughly half of revenue from outside the U.S. The revenue mix of both livestock and pet products also makes for an attractive business model. Both have good growth opportunities but if one were to falter, the other could pick up the slack.
This year's earnings are forecast to grow approximately 15%. Zoetis isn't a cheap stock at 43x forward earnings, but the company has a proven ability to deliver strong growth. It is a dual-threat in a growing animal health market that according to Grand View Research topped $50 billion in 2020 and is expected to grow 9% annually over the next eight years. So as analysts agree, it may be time for investors to schedule a check-up for Zoetis stock.
Featured Article: What is a Special Dividend?7 Stocks That Still Have Upside For Investors to Buy
It can be fun to invest in some speculative stocks. But it should go without saying that those stocks shouldn’t make up the bulk of your portfolio. In fact, it’s important to find a few good stocks that make up the base of your portfolio. These are momentum stocks that are in a strong uptrend.
One way to find such stocks is to look at the most active stocks (or volume leaders). Shares of these companies are among the most traded or have the highest dollar volume of shares traded in a given trading day.
Any stock may crack this list from time to time (for example, when there’s new news about the company). However, stocks tend to find their way on this list consistently that bear watching. That’s because this list indicates that there is pressure among investors to buy or sell the stock. And that makes an investor’s decision very simple.
And that’s the reason we created this special presentation. The stocks on this list are among the most actively traded stocks on the market today. They also share a similar quality. They are coming off strong years in 2020 and seem to be showing some consolidation for another leg up.
View the "7 Stocks That Still Have Upside For Investors to Buy"
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist